Comment Text:
Dear Chairman and Commissioners,
My name is Jonathan Pelczar, and I'm a small business owner from Pennsylvania. Im writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I actively trade on platforms like Kalshi and Polymarket, and I strongly support the CFTC developing proportionate, well-thought-out regulations for prediction markets rather than imposing broad restrictions or bans.
As a business owner, Ive found prediction markets to be an invaluable tool for hedging risks that directly impact my operations. For instance, Ive used these platforms to hedge against policy changes tied to election outcomes that could affect my taxes or supply chain costs. This isnt gambling, its a practical way to manage uncertainty, much like how I might use futures to lock in prices for materials. Beyond my own needs, Ive seen how prediction markets consistently outperform polls and pundits in forecasting elections and other public events. That kind of accurate, real-time information benefits not just traders like me, but anyone making decisions, from policymakers to regular citizens.
Im also a firm believer that regulated markets, like Kalshi, are far safer than unregulated offshore platforms. If the CFTC over-restricts or bans these markets, people wont just stop trading, theyll move to less transparent, riskier venues outside U.S. oversight. Thats a loss for consumer protection and for U.S. leadership in financial innovation. We should be setting the global standard here, not ceding ground to other countries.
Addressing some of your specific questions, like those in Topic Area B on public interest (Questions 7-14), Id argue that prediction markets serve a clear public good through price discovery and risk management. They aggregate information in ways nothing else can, and informed trading only makes prices more accurate, benefiting everyone. On Topic Area C (Questions 15-22), I urge you not to classify event contracts as gaming. They have legitimate economic purposes, like hedging and forecasting, that set them apart from gambling. And regarding Topic Area E on inside information (Questions 29-32), I believe the CFTC already has robust tools to tackle manipulation and insider trading in other derivatives markets. Use those tools, dont punish honest participants with broad bans.
I understand concerns about potential abuse, but banning or overly restricting these markets isnt the answer. It just pushes activity underground and limits the benefits for people like me who use them responsibly. Instead, I ask the CFTC to focus on targeted, proportionate rules that address specific risks while allowing prediction markets to thrive under proper oversight.
Thank you for considering my perspective.
Sincerely,
Jonathan Pelczar
