Comment Text:
Dear Chairman and Commissioners,
My name is Alex Llewellyn, and Im a small business owner based in Illinois. Im writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I actively trade on platforms like Kalshi, and I strongly support the development of well-regulated prediction markets in the United States.
As a business owner, I rely on accurate information to make decisions, especially when it comes to political and economic events that impact my operations. Prediction markets have consistently provided better forecasts than polls or pundits. For example, during the last election cycle, I used Kalshis data to gauge potential policy shifts that could affect my supply chain costs. That kind of insight isnt just helpful for me; its valuable for anyone trying to plan ahead, whether theyre trading or not. These markets aggregate information in a way nothing else does.
I also believe that regulated platforms like Kalshi are far safer than the unregulated offshore alternatives. If the CFTC imposes overly strict rules or bans certain event contracts, people like me wont stop looking for ways to hedge or forecast. Well just end up on less secure, foreign platforms with no oversight. Regulation keeps us in a system where there are rules and protections. Thats a win for consumer safety.
On top of that, prediction markets arent gambling, no matter what some might say. They serve real economic purposes. Ive used them to hedge risks tied to interest rate changes and election outcomes that could hit my business with new taxes or regulations. Its no different from using futures to lock in a price for raw materials. Its about managing uncertainty, not rolling dice.
Im aware of concerns about manipulation or insider trading, and I get why those are issues. But the CFTC already has powerful tools to address fraud and abuse in other derivatives markets. Those same tools can work here. Banning or over-restricting prediction markets to stop a few bad actors feels like punishing everyone for something thats already illegal. Id urge you to focus on enforcing existing laws rather than creating broad prohibitions.
I also want to touch on a couple of specific questions from the ANPR. In response to Questions 7 and 8 under Public Interest, I believe prediction markets drive innovation and provide unique price discovery that benefits society. And for Question 15 under Listed Activities, Id argue event contracts should not be classified as gaming when theyre used for hedging or forecasting real-world risks.
Finally, I think the US has a chance to lead in financial innovation. We shouldnt cede this space to other countries by over-regulating. I respectfully ask the CFTC to support proportionate regulation of prediction markets, ensuring consumer protection without banning or overly restricting these valuable tools.
Thank you for considering my input.
Sincerely,
Alex Llewellyn
