Comment Text:
Dear Chairman and Commissioners,
My name is Joshua Henderson, and I'm a trader and investor from Missouri. I've been actively trading on prediction markets like Kalshi for a while now, and Im writing to support the 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 for individuals like me and for society as a whole, and I want to share my perspective.
As a trader, Ive seen firsthand how prediction markets provide information thats just not available anywhere else. Whether its forecasting election outcomes or other public events, the prices on these platforms consistently beat polls and pundits in accuracy. Thats not just useful for me when Im making trading decisions; its valuable for everyone, from regular citizens to policymakers who need better data to make informed choices. I also value the freedom to participate in legal, regulated markets like Kalshi. These platforms arent gambling. They require research and judgment, much like trading stocks or commodities. Classifying event contracts as gaming would be a mistake when they serve real economic purposes like price discovery and risk management.
Im also concerned about what happens if the CFTC over-restricts or bans these markets. If that happens, activity will just move to unregulated offshore platforms, which are far less safe for consumers. Regulated markets under CFTC oversight offer protections that offshore sites dont, and Id much rather trade in a system where there are clear rules and accountability. On that note, I believe the CFTC already has strong tools to tackle issues like manipulation and insider trading. Theres no need for broad bans when targeted enforcement can address specific bad actors. Informed trading, in my view, actually improves price discovery and benefits all participants by making the market more accurate.
I also think the U.S. should be a leader in financial innovation. If we clamp down too hard on prediction markets, we risk ceding ground to other countries that are more open to these tools. Addressing some of your specific questions, like those in Topic Area B (Questions 7-14) on balancing innovation and consumer protection, Id urge you to prioritize rules that encourage growth while protecting users. And for Topic Area E (Questions 29-32) on inside information, I believe the benefits of informed trading for accurate pricing outweigh the risks, especially since existing laws already prohibit insider trading by federal officials.
Prediction markets matter to me as a trader, and they matter to the public for better decision-making. I ask that you support proportionate, targeted regulation rather than broad restrictions or categorical bans. Lets keep these markets accessible, safe, and innovative under CFTC oversight.
Sincerely,
Joshua Henderson
