Comment Text:
Dear Chairman and Commissioners,
My name is Jeff Varallo, and I'm an everyday citizen from Pennsylvania writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I've been actively trading on prediction markets like Kalshi for a while now, and I strongly support the idea of well-regulated markets that allow regular people like me to participate.
I value the freedom to take part in legal, regulated platforms. Prediction markets aren't just a hobby for me; they're a way to engage with real-world events and make informed decisions. I put time into researching outcomes. This isn't gambling. It's about using judgment and analysis, much like investing in stocks. Classifying event contracts as "gaming" feels wrong when they serve legitimate purposes like hedging and price discovery. I urge you to consider this in your response to questions 15 through 22 about defining gaming versus legitimate markets.
I'm also concerned about consumer protection, but I believe the answer lies in regulation, not restriction. Platforms like Kalshi, which operate under CFTC oversight, provide transparency and safeguards that I trust. If you ban or over-restrict these markets, people won't just stop trading. They'll move to unregulated offshore platforms with no oversight, no accountability, and no protection for users like me. I've seen ads for some of these sites, and they look sketchy at best. Keeping activity on regulated U.S. markets is safer for everyone. This ties directly to questions 7 through 14 on balancing innovation and consumer protection. Regulation should aim to protect participants while allowing innovation to thrive, not push us into riskier alternatives.
I've benefited from prediction markets as a way to understand complex issues and even hedge personal risks. For example, trading on election outcomes last year helped me think through potential policy changes that could hit my small side business. That kind of insight is valuable, and I shouldn't lose access to it because of overly tight rules. I ask that you focus on proportionate regulation that addresses specific risks like manipulation or insider trading, which I know you're already equipped to handle, rather than broad bans.
Thank you for taking the time to read my comment. I strongly encourage the CFTC to support regulated prediction markets and avoid over-restricting or banning them. Keep platforms like Kalshi accessible to everyday folks like me, under rules that protect us without shutting down a useful tool.
Sincerely,
Jeff Varallo
