Comment Text:
Dear Chairman and Commissioners,
My name is Justin Guillaume, and I'm an everyday citizen from California who actively trades on prediction markets like Kalshi and Polymarket. I'm writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516) to express my strong support for well-regulated prediction markets. I believe they provide real value to people like me, and I urge the CFTC to adopt proportionate regulations rather than overly restrictive rules or bans.
I've found prediction markets incredibly useful for hedging personal financial risks. For instance, I run a small side business, and election outcomes or economic policy changes can directly impact my costs and planning. Trading on these platforms lets me offset some of that uncertainty, much like how farmers hedge crop prices. Beyond my own use, I see how these markets aggregate information in ways polls and pundits often can't match. The prices reflect real-world probabilities, and that kind of insight helps not just traders but anyone paying attention, including policymakers and the public.
I also want to stress that regulated markets like Kalshi are far safer than unregulated offshore platforms. If the CFTC over-restricts or bans event contracts, people won't stop trading; they'll just move to less transparent, riskier venues. I've traded on both regulated and unregulated platforms, and the difference in consumer protection is night and day. Regulation keeps things above board, with clear rules and accountability. Pushing activity offshore would hurt regular folks like me who want to participate safely.
On the topic of whether these contracts are "gaming," I strongly disagree with that label. Trading on prediction markets takes research and judgment, just like investing in stocks or commodities. It's not a roll of the dice; it serves legitimate economic purposes like hedging and price discovery. Addressing specific CFTC questions, like those in Topic Area C (Questions 15-22), I believe event contracts should be treated as financial instruments, not gambling. As for concerns about manipulation or insider trading, raised in Topic Area E (Questions 29-32), I think the CFTC already has robust tools to tackle bad actors. Enforce those existing rules instead of broad bans that punish everyone.
One area I do think needs regulation is payout structures. Right now, some 50/50 contracts pay back only 90%, taking a 10% cut. I believe the CFTC should set a minimum payout of 95% to protect consumers. Also, to prevent technical glitches or delays, if a contract is bought within 3 seconds, it should be locked in and processed without fail. These targeted fixes address real issues without stifling the market.
Prediction markets are a powerful tool for people like me, and I ask the CFTC to regulate them thoughtfully. Focus on specific risks with targeted rules, not categorical restrictions that push activity offshore. Thank you for considering my input.
Sincerely,
Justin Guillaume
