Comment Text:
Dear Chairman and Commissioners,
My name is Andrew Saxton, and I'm a trader and investor based in California. I've been active in financial markets for years, and I've used prediction markets a few times to both hedge personal risks and gain insights into events like elections. I'm writing in response to the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516, to express my strong support for well-regulated prediction markets in the United States.
I believe prediction markets offer unique value that can't be found elsewhere. They've consistently provided more accurate forecasts on public events, like elections, than traditional polls or pundits. As a trader, I rely on good information to make decisions, and these markets aggregate data in a way that's useful not just to me, but to anyone paying attention. Beyond that, they allow me to hedge real financial risks. For instance, I've used event contracts to offset potential impacts of policy changes on my investments. This isn't gambling. It takes research and judgment, just like trading stocks or commodities. Labeling it as "gaming" dismisses the real economic purpose these contracts serve, whether it's price discovery or risk management.
I'm also concerned about U.S. competitiveness in financial innovation. We should be leading the way on new markets and technologies, not ceding ground to other countries. Regulated platforms like Kalshi, operating under CFTC oversight, are far safer than unregulated offshore alternatives. If we over-restrict or ban these markets, activity will just move to less secure venues, putting participants at greater risk. I value the freedom to participate in legal, regulated markets, and I trust the CFTC's existing tools to handle issues like manipulation or insider trading. There's no need for broad prohibitions when targeted enforcement can address bad actors. Plus, informed trading actually improves price discovery, benefiting everyone in the market, not just a few.
Addressing specific questions from the ANPR, Id like to speak to Question 7 on balancing innovation and consumer protection. Proportionate regulation, not categorical bans, is the answer. On Question 15, regarding defining "gaming," I urge the CFTC to recognize that event contracts serve legitimate purposes and shouldn't be lumped in with gambling. And for Question 29 on inside information, I believe informed traders often enhance market accuracy, and existing laws already prohibit misuse of nonpublic data.
I ask that the CFTC support proportionate regulation of prediction markets. Don't ban or overly restrict them. Let's keep the U.S. at the forefront of financial innovation while protecting participants through smart oversight.
Sincerely,
Andrew Saxton
