Comment Text:
Dear Chairman and Commissioners,
My name is Tyrone Blake, and I'm a student from California 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, mostly out of curiosity and as part of my academic interest in how information gets aggregated in society. I strongly support well-regulated prediction markets because they provide unique value for public decision-making and price discovery, and I believe the CFTC can craft rules that protect consumers without stifling this innovation.
As a student, I've seen how hard it is to find reliable data or forecasts on major events, whether it's an election outcome or a policy change. Prediction markets cut through the noise. Their prices often reflect probabilities more accurately than polls or expert opinions, and that's information everyone can use, not just traders. I've personally checked platforms like Kalshi to gauge the odds on political events, and it helped me understand public sentiment in a way no news article could. This isn't gambling to me. It takes research and critical thinking, just like analyzing data for a class project.
I also want to highlight the academic value here. Prediction markets generate transparent data that researchers like me can study to understand how people assess risk and uncertainty. This ties directly to better public decision-making. If prices on these platforms reflect real-time collective knowledge, policymakers and citizens can make more informed choices. I'm particularly drawn to the idea that informed trading improves price discovery, which benefits all market participants. When people with real insight trade, the market price gets closer to the truth. That's a net positive, and it's why I think the CFTC shouldn't over-restrict who can participate or what can be traded.
Looking at some of the questions in the ANPR, I want to address numbers 7 and 29. On question 7, about balancing innovation and consumer protection, I think the focus should be on clear rules for transparency and anti-manipulation, not broad bans. Prediction markets are a tool for democratizing information, and shutting them down would just push activity to unregulated offshore sites. On question 29, regarding whether informed traders help price discovery, I believe they absolutely do. The more knowledgeable participants there are, the better the market reflects reality. Insider trading is already illegal, so the answer isn't to limit markets but to enforce existing laws.
I get the concerns about manipulation or bad actors, and those need to be addressed. But the CFTC already has tools to tackle fraud and abuse in other markets. Use those same powers here. Banning or over-restricting prediction markets would punish regular people like me who value the information they provide.
I urge you to support proportionate regulation that allows prediction markets to thrive while protecting participants. Let's keep the US at the forefront of financial innovation and data transparency.
Sincerely,
Tyrone Blake
