Comment Text:
Dear Chairman and Commissioners,
My name is Hassan Muhammad, and I'm a trader and investor based in California. I've been actively involved in financial markets for years, and I rely on prediction markets like Kalshi to better understand the world around me and make smarter decisions. 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.
As someone who trades on platforms like Kalshi, I've seen firsthand how these markets provide insights that polls and pundits often miss. Whether it's forecasting election outcomes or other public events, the aggregated wisdom of many traders produces more accurate information, which helps not just me but everyone who pays attention to these prices. This isn't gambling, it's a legitimate tool for price discovery and better decision-making. Classifying event contracts as "gaming" ignores their real economic purpose, like helping individuals and businesses hedge risks. For example, I use these markets to offset uncertainties around policy changes that could affect my investments.
I also value the freedom to participate in legal, regulated markets. Platforms like Kalshi, under CFTC oversight, are far safer than unregulated offshore alternatives. If the U.S. over-restricts or bans prediction markets, activity will just move to less transparent venues, undermining consumer protection. The U.S. should lead in financial innovation, not cede ground to other countries. Regulated markets improve transparency and create an equitable space for traders like me to access information that would otherwise be locked away with big institutions.
I'm aware of concerns about manipulation or insider trading, but the CFTC already has robust tools to address these issues in other derivatives markets. Those same tools can work here. Informed trading actually improves price discovery, benefiting all participants. Banning broad categories of contracts to stop a few bad actors punishes the majority of honest traders. I urge you to focus on proportionate, targeted regulation instead, as discussed in questions 7-14 on public interest and 33-40 on classification and costs.
Prediction markets are a powerful tool for transparency and risk management. I respectfully ask the CFTC to support their growth with fair, balanced rules that protect consumers without stifling innovation or pushing activity offshore. Thank you for considering my perspective.
Sincerely,
Hassan Muhammad
