Comment Text:
Dear Chairman and Commissioners,
My name is Aaron Goldstein, and I'm a finance professional based in New York. I've been working in the financial industry for over a decade, analyzing markets and trends, and I've come to appreciate tools that provide real, actionable insights. That's why I'm writing to express my strong support for proportionate regulation of prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I've used platforms like these a few times myself, and I believe they serve a valuable purpose for individuals and society when properly overseen.
In my experience, prediction markets consistently deliver more accurate forecasts for elections and major public events than traditional polls or pundits. I've seen firsthand how the aggregated wisdom of traders often cuts through the noise of opinion pieces and biased surveys. For example, during the last election cycle, I checked a prediction market to gauge the likelihood of certain outcomes, and the probabilities were far closer to the final result than what I saw on cable news. This kind of information isn't just useful for traders like me; it helps journalists, policymakers, and everyday citizens make sense of complex events. Its better data for better decisions.
Beyond forecasting, these markets offer practical ways to hedge personal and business risks tied to political or economic uncertainty. As someone in finance, I see clients and colleagues grappling with how policy changes might impact investments or operations. A regulated prediction market can provide a tool to manage that exposure, whether it's an election affecting tax policy or a regulatory shift hitting a specific sector. This isn't gambling; it's a legitimate financial instrument, much like futures or options I deal with daily.
I'm also concerned about the alternative if the CFTC over-restricts these markets. Regulated platforms like Kalshi, operating under CFTC oversight as a designated contract market, provide transparency and accountability. If heavy-handed rules push activity to unregulated offshore sites, traders lose protections, and the CFTC loses visibility. Thats a worse outcome for everyone. On this point, Id like to address Question 7 from the ANPR on balancing innovation and consumer protection. I believe regulation should focus on strengthening oversight of domestic markets, not driving activity underground.
Lastly, regarding concerns about manipulation or insider trading, as raised in Questions 29-32, I want to stress that the CFTC already has robust tools to address these issues. Laws against insider trading and market manipulation apply across derivatives markets, and they can be enforced here too. Banning or overly restricting prediction markets punishes honest participants without solving the root issues. Targeted enforcement is the better path.
I urge the CFTC to support well-regulated prediction markets with rules that address specific risks without stifling innovation. These platforms provide unique value through forecasting, hedging, and price discovery, and with the right oversight, they can thrive safely. Thank you for considering my perspective.
Sincerely,
Aaron Goldstein
