Comment Text:
Dear Chairman and Commissioners,
My name is Lukas Lutthans, and I'm a student from Washington state 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 to follow elections and other public events, and I believe they have real value for people like me who want to understand the world better. I'm asking you to support proportionate regulation of these markets rather than banning or overly restricting them.
As a student, I find prediction markets incredibly useful for cutting through the noise of news and social media. I've seen firsthand how their forecasts on election outcomes often beat out polls or pundit opinions. That kind of accuracy isn't just interesting, it's helpful for anyone trying to make sense of big events. I think this benefits society as a whole, not just traders. But what worries me is the idea of pushing these markets underground. I've looked at platforms like Kalshi, which operate under CFTC oversight, and they feel much safer than the unregulated offshore sites out there. If we over-restrict or ban prediction markets here, people will just turn to those less secure options. That seems like a step backward.
I also believe the US should be leading the way in financial innovation. We're a hub for new ideas, and prediction markets are part of that. If we clamp down too hard, we risk losing ground to other countries that are more open to these tools. On top of that, I understand there are concerns about manipulation or insider trading, but aren't those issues already covered by existing laws? From what I've read, the CFTC has strong tools to go after bad actors in any regulated market. Using those tools makes more sense than broad restrictions that punish everyone.
I'd like to touch on a couple of specific questions from the ANPR. Regarding Question 7 on balancing innovation and consumer protection, I think regulation should focus on transparency and oversight, not outright bans. And for Question 29 about inside information, I believe the answer lies in enforcing current laws rather than shutting down markets entirely. A few bad actors shouldn't spoil a useful tool for the rest of us.
I'm just a student, not an expert, but I see prediction markets as a way to democratize information and give regular people a stake in understanding the world. Please consider regulating them in a way that keeps them safe and accessible here in the US, without driving activity offshore or stifling innovation. Thank you for taking the time to read my comment.
Sincerely,
Lukas Lutthans
