Comment Text:
Dear Chairman and Commissioners,
My name is Dave Rodriguez, and I'm a trader and investor based in New Mexico. I've been actively trading on prediction markets like Kalshi for a while now, and Im writing to support proportionate regulation of these markets in response to your Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets are valuable tools for individuals like me, and I want to share why I think the CFTC should regulate them thoughtfully instead of imposing bans or overly harsh restrictions.
As a trader, I rely on prediction markets to hedge real financial risks that impact my personal and business decisions. For instance, I've used event contracts on Kalshi to protect myself against potential economic shifts tied to election outcomes or Federal Reserve decisions. These aren't bets or games; they're practical tools that help me manage uncertainty, much like futures or options do for other investors. I strongly believe event contracts shouldn't be classified as gaming. They serve a legitimate economic purpose, whether it's hedging risks or providing price discovery that benefits everyone, not just traders.
I'm also convinced that prediction markets give us information you can't find elsewhere. I've seen firsthand how their forecasts often beat polls or pundits in accuracy. Thats because informed trading, where people bring real knowledge to the table, sharpens the market's predictions. This isnt a flaw; its a strength that helps everyone make better decisions. And speaking of flaws, I know there are concerns about manipulation or insider trading. But the CFTC already has strong tools to tackle those issues in other derivatives markets. Use those same powers here. Banning or over-restricting prediction markets doesnt solve the problem; it just pushes activity to unregulated offshore platforms where theres no oversight at all. Regulated markets like Kalshi are far safer, and Id rather trade in a system where the rules are clear and enforced.
I also think the U.S. should be a leader in financial innovation. If we clamp down too hard, we risk losing ground to other countries that welcome these markets. Why let them take the lead? Lets build a framework that keeps innovation here while protecting participants. Regarding some of your specific questions, like those in Topic B on public interest (Questions 7-14), I believe prediction markets balance innovation with consumer protection by offering unique hedging tools and accurate data. And on Topic C about listed activities (Questions 15-22), I urge you not to lump event contracts under gaming; theyre investments based on research and judgment.
Please support a regulatory approach that allows prediction markets to thrive while addressing specific risks with targeted rules. Dont let broad bans or overreach push people like me to less safe venues. I appreciate the chance to weigh in and hope my perspective as a trader helps shape a sensible path forward.
Sincerely,
Dave Rodriguez
