Comment Text:
Dear Chairman and Commissioners,
My name is Joseph Ellen, and Im a trader and investor based in Virginia. Im writing to provide my input on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I actively trade on platforms like Kalshi and Polymarket, and I strongly support the development of well-regulated prediction markets in the United States. I believe they offer unique value to people like me and to society as a whole, and I urge the CFTC to craft rules that encourage innovation while protecting consumers.
As a trader, Ive seen firsthand how prediction markets provide information thats hard to find elsewhere. Whether its gauging the likelihood of an election outcome or a major economic policy shift, these markets often predict events more accurately than polls or talking heads. This isnt just helpful for those of us trading; its useful for anyone who wants a clearer picture of what might happen next. I also dont see this as gambling. Trading on these platforms requires research and judgment, much like trading stocks or commodities. Classifying event contracts as gaming feels like a misstep to me. They serve real economic purposes, like helping people hedge against uncertainties that affect their lives or businesses.
Im particularly concerned about the risk of over-restriction or outright bans. If the U.S. clamps down too hard, activity will just move to unregulated offshore platforms. Ive traded on both regulated markets like Kalshi and offshore ones like Polymarket, and the difference in safety and oversight is night and day. Regulated markets have accountability; offshore ones dont. Pushing traders like me to less safe venues isnt the answer. Instead, the CFTC should focus on consumer protection through smart regulation, not prohibition. This ties into a broader point: the U.S. should be a leader in financial innovation. If we stifle prediction markets here, other countries will step in, and well lose the chance to shape this space.
Id like to address a couple of specific questions from the ANPR. On Question 15, regarding how to define gaming versus legitimate markets, I believe the focus should be on whether a contract serves an economic purpose like hedging or price discovery, not on subjective labels. And on Question 7, about balancing innovation and consumer protection, I think the answer lies in targeted rules that address real risks without shutting down entire markets.
I understand concerns about manipulation or insider trading, but the CFTC already has tools to tackle those issues in other markets. Apply them here rather than punishing everyone by restricting access. Im asking you to support proportionate regulation that lets traders like me participate in legal, regulated prediction markets while keeping bad actors in check. Lets keep this industry growing in the U.S. under proper oversight.
Thank you for considering my perspective.
Sincerely,
Joseph Ellen
