Comment Text:
Dear Chairman and Commissioners,
My name is John Kelly, and I'm a student from Texas writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I've used prediction markets a few times myself, and I believe they have real value for society. I'm asking you to support proportionate regulation of these markets rather than imposing heavy restrictions or bans.
As a student, I spend a lot of time studying how information shapes public decision-making, especially around elections and major events. I've seen firsthand that prediction markets often provide better forecasts than polls or pundits. I remember checking platforms like Kalshi during the last election cycle, and their odds were closer to the actual outcome than most news outlets predicted. That kind of accuracy isn't just interesting, its useful for everyone, from regular people like me to policymakers who need reliable data. I think these markets play a key role in price discovery and better public information, which ties directly to your questions 7 and 8 about public interest and innovation.
I also value the freedom to participate in legal, regulated markets. Prediction markets aren't gambling, in my view. They require research and judgment, much like investing in stocks. Classifying event contracts as "gaming" undercuts their legitimate economic purpose, whether it's forecasting or even hedging risks tied to public events. Id urge you to consider this in your questions 15 and 16 about defining gaming versus legitimate markets. Plus, having access as an everyday person feels fair. If only big institutions can trade, they keep all the insights, and thats not right.
Another big concern for me is safety and US leadership. Regulated platforms like Kalshi, operating under CFTC oversight, are far safer than unregulated offshore sites. If we over-restrict or ban these markets, people will just go to less secure places, and the US risks losing ground in financial innovation to other countries. I believe America should be a leader here, not a follower. This connects to your questions 33 and 34 on classification and costs, where I think regulation should aim to keep innovation domestic and safe.
I understand there are worries about manipulation or insider trading, but the CFTC already has tools to address those issues in other markets. Use those same powers here instead of broad prohibitions that punish everyone. Shutting down prediction markets over a few bad actors would be like closing the stock market over insider trading. Its not the answer.
I hope youll craft rules that allow prediction markets to thrive under fair oversight. Theyre a powerful tool for forecasting, participation, and innovation, and I want to see the US lead the way.
Sincerely,
John Kelly
