Comment Text:
Dear Chairman and Commissioners,
My name is Kevin Troutt, and Im writing from California where I work in politics. Im relatively new to prediction markets, but Ive become a strong supporter of them after seeing their potential to provide valuable information and opportunities for regular people like me. Im commenting on the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516) to urge the CFTC to support well-regulated prediction markets with proportionate rules, not heavy-handed restrictions or bans.
Working in politics, Ive seen how often polls and pundits get things wrong. Prediction markets, on the other hand, aggregate real information from real people putting their money where their mouth is. They consistently produce more accurate forecasts, which is useful not just for traders but for the public, policymakers, and even my own field. Beyond that, these markets let individuals and businesses hedge against real risks, whether its an election outcome affecting a small business or a policy shift impacting an industry. This isnt gambling. Its a legitimate economic tool, and classifying event contracts as gaming ignores their purpose of price discovery and risk management.
Im also worried about over-regulation pushing activity to unregulated offshore platforms. Here in California, it feels like everything is getting harder with new rules and restrictions. For once, can we leave something alone and just regulate it sensibly? Platforms like Kalshi, operating under CFTC oversight, are far safer for consumers than shady offshore alternatives. Banning or over-restricting these markets wont stop people from trading; itll just drive them to places with no protections. The CFTC already has strong tools to tackle manipulation and insider trading in other derivatives markets. Use those tools here instead of broad categorical bans. Targeted, proportionate regulation is the way to go.
I also believe the U.S. should lead in financial innovation, not cede ground to other countries. Prediction markets are a growing field, and if we stifle them, we lose that edge. On a related note, academic research shows informed trading in these markets improves price discovery, benefiting everyone. This ties into questions 7 and 29 from your ANPR about public interest and inside information. I think the benefits of democratized access and better information outweigh the risks, especially since existing laws already prohibit insider trading by federal employees and others with nonpublic info.
Please support the freedom to participate in legal, regulated prediction markets. Dont let excessive regulation push this valuable tool offshore or out of reach for everyday Americans. I urge you to craft rules that protect consumers while fostering innovation and transparency.
Sincerely,
Kevin Troutt
