Comment Text:
Dear Chairman and Commissioners,
My name is Jack Compton, and I'm a student from Pennsylvania writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I've used prediction markets a few times, and I strongly support their regulation in a way that allows them to thrive while addressing legitimate risks. As someone studying and engaging with public policy and data, I see these markets as valuable tools for forecasting and civic participation.
Ive been fascinated by how prediction markets can cut through the noise of polls and pundits to provide clearer signals on elections and other public events. When I used platforms like Kalshi, I was struck by how the prices often reflected outcomes more accurately than traditional sources. This isnt just fun for traders like me, its useful for everyone who wants better information, from journalists to policymakers. Beyond that, I believe these markets let regular people like me have a stake in understanding the world around us. Banning or over-restricting them would limit that freedom and push activity to unregulated offshore platforms, which are far riskier than a regulated space like a CFTC-registered DCM.
I also see real economic value here. Prediction markets arent just speculation, they help individuals and businesses hedge against uncertainty. For instance, a small business owner might use them to offset risks tied to policy changes after an election, or a family could hedge against economic shifts. As a student, Ive read academic studies showing how informed trading in these markets improves price discovery, benefiting all participants by making the data more reliable. This ties into my interest in data transparency, since well-regulated markets can provide a public good through the information they generate.
Addressing some of your specific questions, like those in Topic Area B on public interest (Questions 7-14), I think the CFTC should prioritize innovation and access while using existing tools to prevent abuse. On Topic Area E regarding inside information (Questions 29-32), I believe informed trading often helps accuracy, and existing laws against insider trading by federal officials should be enforced rather than banning entire markets. Finally, on Topic Area A about core principles (Questions 1-6), I urge you to support US competitiveness by fostering financial innovation instead of ceding ground to other countries.
I understand concerns about manipulation or misuse, but the CFTC already has authority to tackle those issues without broad prohibitions. Please focus on proportionate regulation that keeps prediction markets accessible and safe for participants like me. I appreciate the chance to comment and hope youll consider these views as you shape the rules.
Sincerely,
Jack Compton
