Comment Text:
Dear Chairman and Commissioners,
My name is Devin Flores, and I'm a regular citizen from California writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I'm new to prediction markets, but I've taken the time to learn about them, and I strongly support their development under fair and proportionate regulation by the CFTC.
I believe prediction markets offer something unique: information that's often more accurate than polls or pundits. I've seen studies, like those from economists such as Justin Wolfers, showing how these markets aggregate knowledge from many people to predict outcomes better than traditional methods. This isn't just helpful for traders; it gives everyone, from policymakers to regular folks like me, better data to make decisions. Whether it's forecasting election results or other public events, this kind of transparency is a public good.
I'm also convinced that regulated markets, like Kalshi, are a much safer option than unregulated offshore platforms. If the CFTC over-restricts or bans these markets, people won't just stop trading; they'll go to less safe, less accountable sites outside US jurisdiction. That hurts consumer protection, not helps it. I'd much rather see the CFTC set clear rules to keep things fair and transparent right here at home. Plus, the US should be leading the way in financial innovation. We shouldn't let other countries take the lead because we're too cautious.
Another point that matters to me is that event contracts aren't gambling. They serve real economic purposes, like helping people and businesses hedge risks. For example, a small business owner might use a prediction market to protect against policy changes from an election that could impact their taxes or operations. That's not a game; it's a practical tool, just like trading stocks or commodities based on research and judgment.
I appreciate that the CFTC is asking for input on specific issues, like in Questions 7-14 about balancing innovation and consumer protection, and Questions 15-22 on defining gaming versus legitimate markets. My view is that proportionate, targeted regulation is the answer, not broad bans. Address specific risks like manipulation or insider trading with the tools you already have, rather than shutting down entire categories of contracts. And on Questions 29-32 about inside information, I think informed trading actually improves price discovery, benefiting everyone. Existing laws already ban federal employees from misusing nonpublic info, so let's enforce those, not punish the rest of us.
I urge the CFTC to support well-regulated prediction markets that allow everyday citizens like me to participate in legal, transparent platforms. Don't ban or over-restrict them. Keep the focus on fair rules that protect consumers while letting innovation thrive.
Thank you for considering my comments.
Sincerely,
Devin Flores
