Comment Text:
Dear Chairman and Commissioners,
My name is Brenen Basaldua, and I'm a trader and investor based in California. I've been actively trading on prediction markets like Kalshi for a while now, and I'm writing to support well-regulated prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets provide real value to individuals like me, to businesses, and to society as a whole, and I urge the CFTC to regulate them proportionately rather than imposing overly restrictive rules or outright bans.
As a trader, I've seen firsthand how prediction markets offer information you can't get anywhere else. Their forecasts on elections and public events consistently beat polls and pundits. I rely on this data not just for trading but to make sense of the world around me. Beyond that, these markets let me hedge personal financial risks, like how policy changes might impact my investments or taxes. This isn't gambling; it takes research and judgment, just like trading stocks or commodities. Classifying event contracts as "gaming" (as discussed in Questions 15-22) ignores their legitimate economic purpose, like price discovery and risk management.
I'm also concerned about U.S. competitiveness. If we over-restrict or ban these markets, we push activity to unregulated offshore platforms where there's no consumer protection. I've traded on Kalshi, a CFTC-registered market, and I feel much safer there knowing rules are in place. Banning or stifling these markets would mean ceding financial innovation to other countries. The U.S. should be leading here, not falling behind (relevant to Questions 7-14 on public interest and innovation).
On the issue of manipulation or insider trading (Questions 29-32), I get the concern. But the CFTC already has strong tools to tackle fraud and manipulation in other derivatives markets. Use those tools instead of broad bans. Informed trading actually helps price discovery, making markets more accurate for everyone. And banning entire markets to stop a few bad actors just punishes the rest of us who play by the rules. Plus, pushing activity offshore makes oversight even harder.
I also want to highlight the academic research backing prediction markets. Studies show they aggregate information efficiently, benefiting public decision-making. This isn't just about traders like me; it's about better data for everyone. Proportionate regulation that targets specific risks, rather than categorical restrictions, is the way to go (as raised in Questions 23-28 on procedural aspects).
In short, I ask the CFTC to support prediction markets with fair, targeted rules. Don't ban or over-restrict them. Let regular people like me participate in legal, regulated markets that provide real value through forecasting, hedging, and information. I'm happy to provide more input if needed.
Sincerely,
Brenen Basaldua
