Comment Text:
Dear Chairman and Commissioners,
My name is Bickle Travis, and I'm a trader and investor from California. I manage a proprietary trading firm and am a top 1% market maker on Polymarket, with years of experience in prediction markets and event contract trading. I'm writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516) to express my strong support for well-regulated prediction markets and to share my perspective as someone deeply involved in these platforms.
Prediction markets are invaluable to me, not just as trading opportunities, but as critical tools for hedging and risk management. I use them to offset financial risks tied to political outcomes, economic data releases, and other events that impact my firm's capital deployment. Beyond personal use, these markets produce forecasts that consistently outshine polls or pundits. The aggregated wisdom of traders offers insights I can't get elsewhere, and that benefits not just me but the public, media, and even policymakers who rely on accurate information for decision-making.
I also believe the U.S. should be at the forefront of financial innovation. If we over-restrict or ban these markets, we risk pushing activity to unregulated offshore platforms and ceding leadership to other countries. Regulated markets like Kalshi, operating under CFTC oversight, are the safer, better option. The freedom to participate in legal, well-monitored markets is something I value as a trader and citizen. It's worth noting that informed trading, even by those with strong knowledge, improves price discovery and makes these markets more efficient for everyone.
That said, I have concerns about settlement mechanisms, particularly on platforms like Kalshi for high-profile political events. Their rules often state that if an event is canceled without a specific "event does not occur" strike, resolution falls to a discretionary "last fair price" determined by the exchange. This ambiguity creates real uncertainty, impacting my market-making strategies and liquidity provision. Clear, predictable, rule-based settlement is vital for trust and efficiency. Addressing this ties directly to Questions 1 and 2 in your ANPR about core principles and manipulation prevention. I urge the CFTC to push for greater clarity and consistency in contract resolution processes.
I'm also aware of concerns around manipulation and insider trading, but the CFTC already has robust tools to address these issues, as you've done with other derivatives. There's no need for broad bans; targeted enforcement of existing laws is the answer. This relates to Questions 29-32 on inside information. Punishing an entire market for the actions of a few bad actors makes no sense when you have the authority to tackle those problems directly.
In closing, I ask the CFTC to support proportionate regulation of prediction markets. Don't ban or over-restrict them. Focus on clear rules and strong enforcement to foster innovation while protecting participants. Thank you for considering my input.
Sincerely,
Bickle Travis
