Comment Text:
Dear Chairman and Commissioners,
My name is Robson Umdenstock, and I'm a student from Arizona. I'm writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I've used prediction markets a few times myself, and I believe they have real value, both for individuals like me and for society as a whole. I want to urge the CFTC to support proportionate regulation of these markets rather than imposing bans or overly restrictive rules.
As a student, I'm always looking for better ways to understand the world, especially when it comes to big events like elections or economic shifts. Prediction markets have consistently impressed me with how they produce forecasts that are often more accurate than polls or pundits. I've seen this firsthand while following platforms like Kalshi. The aggregated wisdom of many participants, even regular people like me, seems to cut through the noise of opinion pieces or biased surveys. This isn't just useful for traders; it's valuable information for everyone, from journalists to policymakers.
I also worry about the U.S. falling behind in financial innovation. If we over-restrict prediction markets here, we're not stopping the activity, just pushing it to unregulated offshore platforms where there's no oversight at all. I've read about some of these foreign sites, and they don't have the safeguards that a CFTC-registered market like Kalshi offers. Regulation keeps participants safer and ensures transparency. Banning or limiting these markets domestically would mean ceding leadership to other countries while making things riskier for American users.
On the concern of manipulation or insider trading, I get why that's a worry. But the CFTC already has strong tools to tackle these issues in other derivatives markets. I believe those same powers can be applied to prediction markets without needing broad prohibitions. For instance, in response to questions 29-32 in the ANPR about inside information, I think the focus should be on enforcing existing laws against misuse of nonpublic information rather than restricting entire markets. And for questions 7-14 on public interest, Id argue that well-regulated markets strike the right balance between innovation and consumer protection.
Prediction markets aren't perfect, and I understand the need for rules to prevent abuse. But shutting them down or over-regulating them punishes everyone for the actions of a few. I hope the CFTC will craft policies that allow these markets to thrive under clear, fair oversight, keeping the U.S. competitive and ensuring safer participation for people like me.
Thank you for considering my perspective.
Sincerely,
Robson Umdenstock
