Comment Text:
Dear Chairman and Commissioners,
My name is Malcolm Felt, and I'm a trader and investor based in Utah. I've been actively trading on prediction markets like Kalshi and Polymarket for a while now, and Im writing to express my strong support for the proportionate regulation of these markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these platforms offer unique value to people like me, and I want to share why I think the CFTC should support their growth under a fair regulatory framework.
As a trader, Ive found prediction markets to be an incredible tool for gaining insights that I cant get from news or polls. The prices on these platforms often reflect a clearer picture of whats likely to happen, whether its an election outcome or an economic data release. This isnt just helpful for my own trading decisions; its valuable information for anyone paying attention. I also see this as different from gambling. Trading on these markets requires research and judgment, much like trading stocks or futures. Its about understanding real-world events and making informed calls, not rolling dice.
Im particularly concerned about the risk of over-restricting or banning these markets, which would push activity to unregulated offshore platforms. Ive traded on both regulated platforms like Kalshi, which operate under CFTC oversight, and offshore ones like Polymarket. The difference in safety and transparency is night and day. Regulated markets have clear rules, dispute resolution, and accountability. Offshore ones? Youre often on your own if something goes wrong. Driving traders like me to less safe venues by over-regulating or prohibiting event contracts would hurt consumer protection, not help it.
I also think the U.S. has a chance to lead in financial innovation here. If we get this right, we can set a global standard for prediction markets. But if we clamp down too hard, other countries will step in, and well lose that edge. On a related note, I believe informed trading in these markets actually helps everyone. When people with good information participate, the prices get more accurate, which benefits all of us, not just the traders. This ties into Questions 29-31 in your ANPR about inside information and price discovery. I think the CFTC should focus on enforcing existing laws against insider trading rather than restricting entire markets to address a few bad actors.
I urge you to craft rules that allow regular traders like me to participate in legal, regulated prediction markets while addressing specific risks with targeted measures. Dont ban or over-restrict these platforms. Support innovation and consumer protection by keeping these markets accessible and under your oversight. Thank you for considering my perspective.
Sincerely,
Malcolm Felt
