Comment Text:
Dear Chairman and Commissioners,
My name is Nate Molesky, and I'm a student from New York. I've been actively trading on prediction markets like Kalshi for a while now, and I wanted to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I strongly support the idea of well-regulated prediction markets, and I hope the CFTC will craft rules that allow these platforms to thrive while protecting consumers.
As a student, I find prediction markets incredibly valuable. They're not just a way to engage with current events; they often provide forecasts that are more accurate than polls or pundits. I've seen this firsthand when trading on election outcomes or economic indicators, where the market's collective wisdom beats out so-called expert opinions. This isn't just useful for me, but for society as a whole. Better information benefits everyone, from policymakers to regular folks trying to make sense of the world.
I also use these markets to hedge real risks. For example, I've traded on inflation data releases to offset concerns about rising costs impacting my budget. Small businesses and individuals like me need these tools to manage uncertainty, especially in turbulent times. This isn't gambling; it's a legitimate way to protect against real-world risks, much like traditional investing.
I'm all for consumer protection, but I worry that over-restricting or banning prediction markets will push activity to unregulated offshore platforms. I've seen those sites. They're far less safe than a regulated market like Kalshi, where the CFTC already oversees things. Banning these markets doesn't solve problems; it just drives them underground. The US should lead in financial innovation, not cede ground to other countries with looser rules.
I also want to address a few specific questions from the ANPR. On Questions 7-14 about public interest, I believe the CFTC should balance innovation with protection by using the robust tools it already has to combat manipulation and insider trading, rather than imposing broad bans. On Questions 15-22 regarding listed activities, event contracts shouldn't be classified as gaming. They serve real economic purposes like hedging and price discovery. And on Questions 29-32 about inside information, I think informed trading actually improves market accuracy, benefiting all participants, as long as existing laws against insider trading are enforced.
The answer isn't to shut down prediction markets but to regulate them proportionately. Target the specific risks, don't punish everyone with categorical restrictions. I'm asking the CFTC to support a framework that keeps these markets accessible, safe, and innovative for people like me who rely on them.
Thank you for considering my input.
Sincerely,
Nate Molesky
