Comment Text:
Dear Chairman and Commissioners,
My name is Danh Ly, and I'm a trader and investor based in Texas. I've been active in financial markets for years, always looking for ways to make informed decisions with my money. I've used prediction markets a few times, and Im writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516) to express my strong support for well-regulated prediction markets. I believe they provide unique value, both to me as an individual and to society as a whole.
As someone who follows markets closely, Ive seen firsthand how prediction markets often give more accurate forecasts than polls or pundits. Whether its an election outcome or a major public event, the aggregated wisdom of these markets cuts through the noise. Thats information I cant get anywhere else, and its valuable not just to traders like me but to anyone trying to understand whats coming next. Ive also used these markets to hedge real risks. For instance, during the last election cycle, I placed trades to offset potential impacts on my investments tied to policy changes. This isnt gambling; its a practical tool, much like trading stocks or commodities, requiring research and judgment.
Im all for consumer protection, but I believe the answer is regulation, not restriction. Platforms like Kalshi, operating under CFTC oversight, are far safer than unregulated offshore alternatives. If we ban or over-restrict these markets, people like me will just go elsewhere, to places with no safeguards. Thats worse for everyone. Plus, event contracts arent gaming. They serve real economic purposes, like hedging and price discovery, and shouldnt be lumped in with betting. I also think the US should be leading the charge on financial innovation, not handing the advantage to other countries by stifling these markets.
On some of the specific questions in the ANPR, Id like to address a few points. Regarding Questions 7-14 on public interest, I believe the CFTC should balance innovation with protection by focusing on proportionate rules, not broad bans. On Questions 15-22 about listed activities, event contracts should be defined by their economic utility, not mislabeled as gaming. And for Questions 29-32 on inside information, I think informed trading actually improves price discovery and helps everyone. The CFTC already has strong tools to tackle manipulation and insider trading; those should be enforced rather than creating new categorical restrictions.
Im not naive about the risks. Manipulation and unfair practices are real concerns, but shutting down entire markets isnt the answer. Punishing law-abiding participants like me for the actions of a few bad actors doesnt make sense. Instead, I urge the CFTC to develop targeted, fair regulations that let prediction markets thrive while addressing specific issues.
Thank you for considering my input. I strongly support proportionate regulation of prediction markets and ask that you avoid bans or overly restrictive rules that would harm innovation and push activity offshore.
Sincerely,
Danh Ly
