Comment Text:
Dear Chairman and Commissioners,
My name is Robert Yass, and I'm a trader and investor from South Carolina. I've been actively trading on prediction markets like Kalshi for a while now, and Im writing to express my strong support for well-regulated prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets provide unique value to people like me, to businesses, and to society as a whole, and I urge the CFTC to adopt proportionate regulations rather than broad restrictions or bans.
As a trader, I've seen firsthand how prediction markets offer better forecasting than polls or pundits for events like elections and other public outcomes. The prices reflect real, aggregated information you can't get anywhere else, and that helps me make smarter decisions, both financially and personally. Beyond forecasting, these markets let me hedge real risks. Whether it's an election outcome that could impact my taxes or a policy change affecting my investments, prediction markets give me a tool to manage uncertainty. This isn't gambling; it's a legitimate economic activity, much like trading stocks or commodities, and I believe the CFTC should recognize event contracts for their real economic purpose rather than labeling them as gaming.
One thing that stands out to me is the difference between trading on Kalshi versus traditional sportsbooks. At sportsbooks, I was often limited to tiny wager amounts because they couldn't set lines properly or handle sharp bettors like me. On a typical coin-flip bet, I'd have to lay $110 to win $100, which over a year of daily bets could mean an expected loss of $1,825 due to the house edge. On Kalshi, I can post a limit order at 50 cents for a true 50-50 bet, and if filled for 200 contracts, I'm risking about $101 to win $100, cutting my expected loss to around $182.50 a year. That's a huge difference for someone like me, and it shows how prediction markets create tougher competition that benefits customers. If these markets disappear, Im certain most of this volume will just shift to offshore platforms where the U.S. can't collect taxes and customers risk not getting paid. Regulated markets are far safer, and Id rather see the CFTC keep activity onshore with oversight.
Addressing some of your specific questions, like those in Topic B on Public Interest (Questions 7-14), I think prediction markets balance innovation and consumer protection when regulated properly. They aid price discovery and help everyone, not just traders, by providing better information for decision-making. On Topic E regarding Inside Information (Questions 29-32), I believe informed trading actually improves price accuracy and benefits all participants, and the CFTC already has robust tools to tackle manipulation and insider trading without needing broad bans. Finally, on Topic C about Listed Activities (Questions 15-22), I urge you not to classify these contracts as gaming but as legitimate tools for hedging and forecasting.
I also think the U.S. should lead in financial innovation, not cede ground to other countries. Competition in this space will only drive down costs for retail traders like me over time. Please focus on targeted, proportionate rules that address specific risks rather than over-restricting or banning prediction markets. That approach protects consumers while preserving the benefits these markets offer.
Thank you for considering my input.
Sincerely,
Robert Yass
