Comment Text:
Dear Chairman and Commissioners,
My name is Calvin Johnson, and I'm a student from Texas writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I'm new to prediction markets, but I've been studying them as part of my academic interests, and I strongly support their development under fair and proportionate regulation. I believe these markets offer unique benefits to individuals like me, as well as to society at large, and I want to urge the CFTC to craft rules that allow them to thrive while addressing valid concerns.
As a student, I don't have a lot of money to invest, but I see prediction markets as a way for regular people to participate in financial systems that are often locked behind big institutional doors. These markets aren't just for the wealthy; they let someone like me have a stake in understanding and predicting real-world events. More importantly, the information they produce is incredible. I've read studies showing that prediction markets often beat polls and pundits in forecasting election results or economic trends. That kind of accurate, crowd-sourced data helps everyone, not just traders, by improving public decision-making and price discovery. I think it's vital for the US to lead in this kind of financial innovation instead of letting other countries take the lead.
I also see real practical value in these markets for hedging risks. For example, small businesses or even individuals could use them to offset uncertainties like policy changes after an election or economic shifts tied to federal decisions. This isn't gambling; it's a tool for managing real financial exposure. I'm especially concerned that banning or over-restricting prediction markets would push activity to unregulated offshore platforms. Regulated markets like Kalshi, operating under CFTC oversight, are far safer and more transparent. Driving users to sketchy overseas sites would be a step backward.
Addressing some of the CFTC's questions, like those in Topic B on public interest (Questions 7-14), I believe the balance between innovation and consumer protection lies in using the robust tools the CFTC already has to prevent manipulation and insider trading, rather than broad prohibitions. On Topic E (Questions 29-32), I think informed trading actually improves price discovery and benefits all participants by making market predictions more accurate. The answer isn't to ban these markets but to enforce existing laws against bad actors.
I'm asking the CFTC to support well-regulated prediction markets with rules that target specific risks without stifling their potential. Let's keep the US at the forefront of financial innovation and ensure these tools remain accessible and safe for everyone.
Sincerely,
Calvin Johnson
