Comment Text:
Dear Chairman and Commissioners,
My name is Matt Chapman, and I'm a management consultant based in Texas. I'm writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I actively trade on platforms like Kalshi and Polymarket, and I strongly support the development of well-regulated prediction markets. I believe they provide unique value to individuals like me and to society at large, and I want to share my perspective on why they shouldn't be treated as gambling and why they deserve a fair regulatory framework.
As a consultant, I spend a lot of time analyzing trends and advising clients on how to navigate uncertainty, whether it's economic shifts or policy changes. Prediction markets have become a critical tool for me. The prices on these platforms often give insights I can't find in polls or pundit commentary. I've seen firsthand how they consistently outperform traditional forecasts on things like election outcomes or economic indicators. That accuracy isn't just helpful for traders like me; it benefits everyone by providing clearer signals about the future. I think that's a public good worth protecting.
I also want to push back on the idea that event contracts are gambling. Trading on these markets isn't a game of chance. It takes research, analysis, and judgment, much like any other investment I might make in stocks or commodities. For example, I've used prediction markets to hedge against policy changes that could impact my clients' industries. Thats not a bet; it's a calculated decision to manage risk. Classifying these contracts as "gaming," as discussed in Questions 15-22 of the ANPR, ignores their real economic purpose, like price discovery and risk management. I urge the CFTC to recognize this distinction and avoid overly restrictive labels.
Another concern Ive seen raised is about informed trading and potential insider issues, as covered in Questions 29-32. I believe informed traders actually improve price discovery. When people with deep knowledge participate, the market reflects reality more accurately, which helps everyone. Of course, insider trading based on nonpublic information is a problem, but its already illegal. The CFTC has tools to enforce those laws without banning or over-restricting these markets. Punishing all participants for the actions of a few bad actors doesnt make sense to me.
Finally, I value the freedom to participate in legal, regulated markets. These platforms give regular people like me a chance to engage with events that affect our lives, whether its an election or an economic policy. Shutting that down or pushing activity to unregulated offshore sites would be a step backward. Im all for smart oversight, but it should be proportionate.
I respectfully ask the CFTC to support the growth of prediction markets with fair, targeted regulations that address specific risks without broad bans or misclassifications. Thank you for considering my input.
Sincerely,
Matt Chapman
