Comment Text:
Dear Chairman and Commissioners,
My name is Jonathan Flores, and I'm just 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've used prediction markets a few times myself, and I strongly support having these markets regulated in a fair and balanced way, not banned or overly restricted.
I first got interested in prediction markets during the last election cycle. I was frustrated with how often polls and pundits got things wrong, and I found that platforms like Kalshi offered forecasts that were way more on point. It's not just about guessing who wins an election. The prices on these markets give insights into public events that you can't find anywhere else. I believe this kind of information is valuable for everyone, not just traders like me, but also for the media and even policymakers who need accurate data to make decisions. I've read about academic studies, like those by economists such as Justin Wolfers, showing how prediction markets aggregate information better than traditional methods. That kind of transparency and data should be encouraged, not shut down.
I'm also a big believer in the freedom to participate in legal, regulated markets. Letting everyday people like me trade on these platforms isn't a problem, it's a strength. It democratizes access to information and keeps the prices honest. Plus, I've used these markets to hedge personal risks. For example, betting on an election outcome helped me offset some uncertainty about policy changes that could affect my taxes. This isn't gambling, it's a practical tool. If we ban or over-restrict these markets, people will just turn to unregulated offshore platforms, which are far less safe. I'd much rather see the CFTC keep markets like Kalshi under proper oversight here in the U.S.
On some of your specific questions, like those in Topic Area B on public interest (Questions 7-14), I think prediction markets clearly serve a public good through price discovery and risk management. They also help the U.S. stay competitive in financial innovation, which ties into Question 40 on costs and benefits. Why should we let other countries take the lead on this? And regarding Topic Area E on inside information (Questions 29-32), I believe informed trading actually improves price accuracy and benefits everyone in the market. The CFTC already has tools to tackle insider trading and manipulation, so let's use those instead of punishing all participants.
I urge you to support proportionate regulation of prediction markets. Don't ban them or impose rules so strict that they can't function. Keep them safe and accessible for regular people like me, under proper CFTC oversight. Thank you for considering my input.
Sincerely,
Jonathan Flores
