Comment Text:
Dear Chairman and Commissioners,
My name is Yu Cao, and I'm a finance professional based in Texas. I've been working in the financial sector for years, analyzing markets and managing risk, and Im writing to express my strong support for proportionate regulation of prediction markets as outlined in your Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). Ive actively traded on platforms like Kalshi and Polymarket, and Ive seen firsthand how valuable these markets are for both personal financial planning and broader societal benefits.
As someone who deals with financial uncertainty daily, I rely on prediction markets to hedge risks that impact my personal and professional life. For instance, Ive used these platforms to protect against potential policy changes or economic shifts, like interest rate decisions or election outcomes, that could affect my investments or business decisions. These markets arent just a game to me; theyre a practical tool. Whats more, the forecasts they produce consistently outperform polls or pundits. Ive seen prediction market prices reflect real-world probabilities more accurately than any news outlet or survey, and that kind of aggregated insight is invaluable to everyone, not just traders like me.
I also value the freedom to participate in legal, regulated markets. Platforms like Kalshi, which operate under CFTC oversight, provide a safe and transparent environment. Ive traded on unregulated offshore platforms like Polymarket too, and the difference is night and day. Without regulation, theres no accountability, and users are exposed to all sorts of risks, from fraud to platform failure. If the CFTC over-restricts or bans prediction markets, people like me wont stop trading; well just be pushed to less safe, offshore alternatives. Regulation keeps us in a protected space, and I urge you to prioritize that over prohibition.
Regarding some of your specific questions in the ANPR, Id like to address Question 7 under Public Interest. I believe prediction markets serve the public good by providing unique data and democratizing access to financial tools. And on Question 23 under Procedural Aspects, I think public interest determinations should focus on ensuring platforms are regulated, not on banning entire categories of contracts. As for concerns about manipulation or insider trading, I get it. Those are real risks. But the CFTC already has strong tools to combat fraud in other derivatives markets, and those can be applied here without shutting down an entire industry.
Prediction markets are a powerful innovation, and the U.S. should lead in this space. I ask that you craft rules that support well-regulated markets while addressing specific risks with targeted measures. Dont ban or over-restrict something thats already proving its worth to people like me and to society at large. Thank you for considering my perspective.
Sincerely,
Yu Cao
