Comment Text:
Dear Chairman and Commissioners,
My name is Caden Paternostro, and I'm a trader and investor based in Louisiana. I actively trade on prediction markets like Kalshi, and Im writing to support the proportionate regulation of these markets in response to your Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets provide real value to individuals like me, to businesses, and to society as a whole through better information and risk management.
Ive found prediction markets to be an incredible tool for forecasting events like elections and other public outcomes. Honestly, their track record often beats polls or pundits, and thats not just useful for traders like me. Its valuable for anyone making decisions, whether thats a business planning around policy changes or a regular person trying to understand whats coming next. On Kalshi, Ive traded contracts tied to economic indicators and political events, and the prices reflect a kind of crowd wisdom you cant get elsewhere. This ties directly to your questions on public interest and price discovery (Questions 7-10). I think the CFTC should recognize how these markets improve information for everyone, not just participants.
I also want to stress that event contracts arent gambling. They serve real economic purposes, like hedging risks. For example, Ive used them to offset potential impacts from election outcomes that could affect my investments or tax planning. This isnt a game; its a practical tool, much like trading stocks or futures based on research and judgment. I urge you to avoid classifying these as "gaming" under Questions 15-22 and instead focus on their legitimate uses.
Im all for regulation, but it needs to be targeted and fair. The CFTC already has strong tools to tackle manipulation and insider trading, as you note in Questions 1-6 and 29-32. Use those instead of broad bans or over-restrictions. Banning categories of contracts or shutting down markets just pushes activity to unregulated offshore platforms, which are far less safe than a regulated space like Kalshi. Plus, the U.S. should be leading in financial innovation, not letting other countries take the reins. I hope youll consider this under Questions 33-40 when weighing costs and benefits.
Informed trading, even by those with deep knowledge, often improves price discovery and benefits all of us in the market. The answer to concerns about insiders isnt to kill the market; its to enforce the laws already on the books. Dont punish everyone for the actions of a few.
I ask that the CFTC support well-regulated prediction markets with rules that address specific risks without stifling their benefits. Lets keep these markets accessible, safe, and innovative right here in the U.S. Thank you for considering my input.
Sincerely,
Caden Paternostro
