Comment Text:
Dear Chairman and Commissioners,
My name is Austin Pfenninger, and I'm just a regular citizen from Illinois writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I've been trading on platforms like Kalshi for a while now, and I strongly support the idea of well-regulated prediction markets in the United States. I appreciate the chance to weigh in on this issue.
I believe prediction markets are a valuable tool, not just for me but for society. When I trade on Kalshi, I'm not gambling. I'm researching, reading up on events, and making informed decisions about things like election outcomes or economic data releases. These markets give me access to unique information through their prices, often more accurate than polls or pundits. And it's not just about personal gain. The data these markets produce can help everyone, from journalists to policymakers, make sense of an uncertain world. Classifying event contracts as "gaming," as discussed in questions 15-22 of the ANPR, ignores their real economic purpose, like price discovery and hedging. They aren't slots or roulette. They're closer to investing in stocks or commodities.
I'm also concerned about freedom and fairness. As a regular person, I value being able to participate in these legal, regulated markets. If the CFTC over-restricts or bans them, that doesn't stop the activity. It just pushes people like me to unregulated offshore platforms, which are far riskier. I'd much rather trade on a CFTC-registered exchange like Kalshi, where there are protections in place. This ties into questions 7-14 on balancing innovation and consumer protection. Regulation is the answer, not prohibition. Keep these markets safe and accessible here in the US.
On a related note, I think the US has a chance to lead in financial innovation. I've read about academic studies, like those by economists such as Wolfers and Zitzewitz, showing how prediction markets aggregate information efficiently. Why should we cede this cutting-edge space to other countries? Let's set the global standard. Also, regarding questions 29-32 on inside information, I believe informed trading actually helps. It makes prices more accurate, which benefits everyone. The CFTC already has strong tools to tackle manipulation and insider trading in other markets. Use those same tools here instead of blanket restrictions.
I know there are concerns about manipulation or bad actors, and I get that. But banning or over-restricting these markets punishes regular folks like me while the real issues can be addressed with targeted rules. I urge you to support proportionate regulation of prediction markets. Keep them legal, keep them safe, and keep them here in the US.
Thank you for considering my perspective.
Sincerely,
Austin Pfenninger
