Comment Text:
Dear Chairman and Commissioners,
My name is Daniel Moon, and I'm a software engineer from Arkansas. I'm 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. As someone who actively trades on platforms like Kalshi, I've seen firsthand how these markets provide unique value, and I believe the CFTC should focus on proportionate regulation rather than restrictive bans.
Prediction markets aren't just a hobby for me. They're a tool that gives me access to information I can't find anywhere else. As a tech professional, I rely on accurate data to make decisions, and I've found that prediction markets consistently outperform polls and pundits in forecasting events like elections or economic shifts. This isn't just useful for traders like me; it benefits the public, policymakers, and businesses by providing clearer signals about the future. I also use these markets to hedge personal risks, like potential policy changes that could impact my freelance tech projects or costs tied to inflation data.
I'm especially concerned about the idea of classifying event contracts as gaming. That label doesn't fit. Trading on Kalshi requires research and judgment, much like investing in stocks or commodities. These contracts serve real economic purposes, like price discovery and risk management, and shouldn't be lumped in with gambling. I also believe that informed trading, even by those with unique insights, improves market accuracy and helps everyone. The CFTC's questions 29-31 on inside information hit on this, and Id argue that the focus should be on enforcing existing laws against insider trading rather than restricting markets altogether.
Another worry I have is that over-restricting prediction markets will push activity to unregulated offshore platforms. I've seen how regulated markets like Kalshi prioritize consumer protection with clear rules and transparency. If the U.S. bans or limits these markets, people like me will have no choice but to turn to less safe alternatives. On a broader level, the U.S. should be leading in financial innovation, not ceding ground to other countries. Academic research, which I follow closely as a data-driven person, backs this up, showing how prediction markets aggregate information efficiently. This aligns with questions 7-9 in the ANPR about balancing innovation and public interest.
I understand there are concerns about manipulation or bad actors, but the CFTC already has tools to address those issues. Banning entire markets to stop a few problems punishes law-abiding participants like me. Instead, I urge you to craft targeted regulations that protect consumers while preserving access to these valuable tools. Let's keep prediction markets legal, regulated, and accessible here in the U.S.
Thank you for considering my input.
Sincerely,
Daniel Moon
