Comment Text:
Dear Chairman and Commissioners,
My name is Steven Li, and I'm a software engineer from Washington state. I'm writing to express my strong support for well-regulated prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). As someone who actively trades on platforms like Kalshi, I've seen firsthand how these markets provide unique value, both for individuals like me and for society at large.
I got into prediction markets because, as a tech professional, I'm always looking for better data to make informed decisions. Whether it's forecasting election outcomes or economic indicators, the prices on these markets consistently outperform polls and pundits. That accuracy isn't just useful for traders; it helps everyone, from policymakers to regular citizens, understand what's really happening. Beyond that, I've used these markets to hedge personal financial risks, like potential policy changes that could impact my income or investments in tech. It's not gambling. It takes research and judgment, much like trading stocks or futures, and I believe event contracts serve a real economic purpose, not just entertainment.
I also worry about what happens if the CFTC over-restricts or bans these markets. I've seen unregulated offshore platforms out there, and they're far riskier than a regulated exchange like Kalshi. Banning or overly limiting prediction markets won't stop people from participating; itll just push activity to less safe venues. The US should be leading in financial innovation, not ceding ground to other countries. Regulated markets with transparent rules are the way to protect consumers, not prohibitions.
Addressing some of your specific questions, like those in Topic Area B (Questions 7-14) on public interest and price discovery, I believe informed trading actually improves market accuracy and benefits everyone. And on Topic Area C (Questions 15-22) regarding classification as gaming, I strongly argue these contracts aren't gambling but tools for hedging and discovery. As for concerns about manipulation or insider trading, raised in Topic Area E (Questions 29-32), the CFTC already has powerful tools to combat bad actors. Use those existing safeguards instead of broad bans that punish legitimate participants like me.
I'm not blind to the risks. Consumer protection matters, and there need to be rules to prevent abuse. But proportionate, targeted regulation is the answer, not categorical restrictions. Prediction markets offer too much value, from accurate forecasting to risk management, to be stifled. I urge the CFTC to support innovation while adapting existing tools to address specific concerns.
Thank you for considering my input. I hope you'll craft rules that allow prediction markets to thrive under fair oversight.
Sincerely,
Steven Li
