Comment Text:
Dear Chairman and Commissioners,
My name is Andrew Sweeney, and I'm a finance professional based in Idaho. I'm writing to express my strong support for the proportionate regulation of prediction markets as outlined in the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I'm relatively new to these markets, but as someone who works in finance, I see their immense value for individuals, businesses, and society as a whole.
I believe prediction markets offer unique benefits that can't be replicated elsewhere. For one, they consistently produce more accurate forecasts for elections and other public events than traditional polls or pundits. This kind of information is invaluable, not just for traders but for anyone trying to make sense of an uncertain world, from journalists to policymakers. Beyond forecasting, these markets let people like me hedge real financial risks. Whether it's a small business owner worried about policy changes after an election or someone like me timing decisions around economic data releases, prediction markets provide a practical tool to manage uncertainty.
I'm also a firm believer in the freedom to participate in legal, regulated markets. Platforms like Kalshi, operating under CFTC oversight, are far safer than unregulated offshore alternatives. Banning or over-restricting these markets won't stop people from trading; it will just push activity to less transparent, riskier venues. The US has a chance to lead in financial innovation here. We shouldn't cede that ground to other countries by stifling a growing industry. Plus, the CFTC already has strong tools to tackle issues like manipulation and insider trading. Use those existing powers instead of imposing blanket restrictions that punish honest participants.
I want to address a specific concern raised in your questions, particularly around whether event contracts should be seen as gaming (Questions 15-22). I strongly believe they shouldn't. These contracts serve legitimate economic purposes like hedging and price discovery, much like other derivatives I deal with in my work. They're not gambling; they require research and judgment, just like trading stocks or commodities. Also, regarding insider trading worries (Questions 29-32), I think informed trading actually improves price discovery and benefits everyone in the market. The focus should be on enforcing existing laws against misuse of nonpublic information, not banning entire categories of contracts.
As someone who values data transparency and academic research, I'm encouraged by the studies showing prediction markets aggregate information efficiently. That better information helps public decision-making, and we should be fostering it, not restricting it.
I urge the CFTC to support well-regulated prediction markets with targeted rules that address specific risks without stifling innovation or access. Let's keep these markets safe, transparent, and open to everyday Americans like me who want to participate.
Thank you for considering my input.
Sincerely,
Andrew Sweeney
