Comment Text:
Dear Chairman and Commissioners,
My name is Colin Satchie, and I'm a trader and investor based in Wisconsin. I've been following the growth of prediction markets with interest, and I'm writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I've used these markets a few times myself, and I strongly support their development under fair, proportionate regulation. I want to share why I think these markets are valuable and why over-restricting them would be a mistake.
As a trader, I value information. Prediction markets give me insights I can't get from polls or pundits. Time and again, they've proven more accurate on things like election outcomes or major public events. That kind of forecasting isn't just useful for me, it helps everyone, from regular folks to policymakers, make better decisions. I also see real hedging potential here. For instance, I've used these markets to offset risks tied to political events that could impact my investments or personal finances. This isn't gambling, it's a legitimate economic tool, much like trading stocks or commodities based on research and judgment.
I'm also concerned about freedom and fairness. Prediction markets let people like me participate in a legal, regulated space. Platforms like Kalshi, operating under CFTC oversight, are far safer than unregulated offshore sites. If we ban or overly restrict these markets, activity will just move to those shadier venues, which helps no one. The US should be leading on financial innovation, not handing the advantage to other countries. Plus, informed trading in these markets actually improves price discovery, benefiting all participants, not just a few insiders.
I appreciate the CFTC's need to address risks, and Im glad to see questions in the ANPR like 7 and 8 on balancing innovation with consumer protection, or 29 on the role of informed traders in price discovery. My take is that the CFTC already has strong tools to tackle manipulation and insider trading in other derivatives markets. Those can be adapted here without resorting to broad bans. On question 15, about defining gaming versus legitimate markets, I urge you not to classify event contracts as gambling. They serve real purposes, like hedging and information aggregation, backed by solid academic research from economists like Hanson and Wolfers.
I worry that heavy-handed rules would punish honest participants instead of targeting bad actors. Proportionate regulation, focused on specific risks, makes more sense than categorical restrictions. Banning these markets won't stop trading, it'll just push it out of sight and out of reach of US oversight.
Thank you for considering my perspective. I urge the CFTC to support well-regulated prediction markets that allow innovation, protect consumers, and keep the US competitive. Please don't let over-regulation stifle a tool with so much potential.
Sincerely,
Colin Satchie
