Comment Text:
Dear Chairman and Commissioners,
My name is David McCarroll, a full-time trader and investor from New York with a background as a CPA. I'm writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516) to express my strong support for well-regulated prediction markets. As someone who actively trades on platforms like Kalshi, Ive seen firsthand the value these markets bring, not just to me personally, but to society as a whole.
About a year and a half ago, I was let go from my accounting job. After struggling to find work that felt right, I turned to full-time trading, including on prediction markets. This has allowed me to support myself financially, and Im grateful for the opportunity to participate in a legal, regulated space. As a CPA, Ive always believed in striving for efficient markets, and I can say with confidence that prediction markets consistently outperform polls or pundits when it comes to forecasting events like elections or public policy outcomes. The information they generate isnt just useful for traders like me; its valuable for the public, media, and even policymakers who need accurate data to make decisions.
I also see prediction markets as a tool for hedging real risks. Whether its an election outcome that could impact my taxes or a federal policy shift that affects my investments, these markets let me manage uncertainty in a way thats grounded in research and judgment. This isnt gambling, no matter what some might claim. Trading on event contracts requires the same skills I use in other investments, analyzing data and making informed calls. Classifying these as gaming would be a mistake, as they serve legitimate economic purposes like price discovery and risk management.
Im not blind to the risks, though. Concerns about manipulation or insider trading are real, but the CFTC already has powerful tools to address them in other derivatives markets. These can be applied here without resorting to bans or heavy-handed restrictions. And lets be honest, over-restricting prediction markets will just push activity to unregulated offshore platforms, which are far less safe for consumers like me. Regulated markets like Kalshi offer transparency and accountability that protect participants. Plus, the U.S. should be leading in financial innovation, not ceding ground to other countries.
Id like to address a few specific questions from the ANPR. On Questions 7-14 under Public Interest, I believe prediction markets balance innovation with consumer protection when properly regulated, and their price discovery benefits everyone. On Questions 15-22 under Listed Activities, I urge the CFTC to avoid labeling event contracts as gaming and focus on their economic utility. And on Questions 29-32 regarding Inside Information, I think the existing laws and CFTC authority are sufficient to handle bad actors without punishing the broader market.
In closing, I ask the CFTC to support proportionate regulation of prediction markets. Dont ban or over-restrict them. Keep them accessible, safe, and innovative for people like me who rely on them. Thank you for considering my input.
Sincerely,
David McCarroll
