Comment Text:
Dear Chairman and Commissioners,
My name is William Zhu, and I'm a student from Missouri. I'm writing in response to 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 their continued operation under fair, proportionate regulation by the CFTC. I believe these markets offer unique value to society and to individuals like me who are trying to understand complex public events.
As a student, Ive seen firsthand how prediction markets often provide better forecasts for elections and other major events than traditional polls or pundits. The aggregated wisdom of many participants, putting real money on the line, creates a clearer picture of whats likely to happen. This isnt just helpful for traders; its useful for the public, media, and even policymakers who need reliable data to make decisions. Ive personally relied on these platforms to get a sense of election outcomes, and Ive found their accuracy impressive compared to the endless speculation on news channels. Beyond that, the data from these markets is a goldmine for academic research, something I care about deeply as someone in the academic world. Transparent price discovery helps us all make sense of the world.
I also believe event contracts are not gambling. They serve real economic purposes, like helping people hedge risks or gain insight into future events. Calling them gaming feels like a mischaracterization when the skills involved, research and judgment, are so similar to traditional investing. Im all for freedom to participate in legal, regulated markets like Kalshi, which are far safer than unregulated offshore platforms. If the CFTC over-restricts or bans these markets, itll just push activity to less safe spaces where theres no oversight. The U.S. should be leading in financial innovation, not handing that advantage to other countries.
Addressing some of your specific questions, like those in Topic Area B on public interest (Questions 7-14), I think the CFTC should prioritize balancing innovation with consumer protection by using the robust tools it already has to prevent manipulation and insider trading. Theres no need for broad categorical bans when targeted rules can address specific risks. And on Topic Area E (Questions 29-32) regarding inside information, I believe informed trading actually improves price discovery and benefits everyone in the market, as long as existing laws against insider trading are enforced.
I urge the CFTC to support prediction markets with thoughtful, proportionate regulation. Dont ban or overly restrict them. These platforms provide valuable information, encourage civic engagement, and deserve a place in our financial system under your oversight.
Sincerely,
William Zhu
