Comment Text:
Dear Chairman and Commissioners,
My name is Joseph Cole, and I'm just a regular citizen from North Carolina writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I'm new to prediction markets, but I strongly support their existence under fair and sensible regulation. I believe they offer real value to people like me, and I want to see the CFTC craft rules that protect consumers without shutting down this innovative tool.
I've been following the growth of prediction markets, especially platforms like Kalshi that operate under CFTC oversight. What draws me to them is how they provide information you can't get anywhere else. Their forecasts on elections and public events often beat out polls and pundits, and that kind of accuracy helps everyone, not just traders. I also see real potential for hedging personal or small business risks. For instance, if an election outcome could affect my taxes or local regulations, having a way to offset that uncertainty would be a game-changer. This isn't gambling in my view. It takes research and judgment, much like investing in stocks. Labeling event contracts as "gaming" feels wrong when they serve legitimate economic purposes like price discovery and risk management.
I'm also concerned about freedom and fairness. Prediction markets let regular folks like me participate in a system that would otherwise be dominated by big institutions. Plus, the U.S. should be leading in financial innovation, not letting other countries take the reins. If we ban or over-restrict these markets, activity will just move to unregulated offshore platforms, which are far riskier for consumers. Regulated markets under CFTC oversight are the safer bet.
I know there are worries about manipulation or insider trading, and I get that. But the CFTC already has strong tools to tackle those issues in other derivatives markets. Use those same powers here instead of broad bans that punish everyone. Informed trading actually helps make prices more accurate, which benefits all participants. I think proportionate, targeted rules are the way to go, not categorical prohibitions. Looking at some of your specific questions, like those in Topic Area B on public interest (Questions 7-14), I believe the balance should tilt toward innovation with consumer protections built in. And on Topic Area E regarding inside information (Questions 29-32), I think the focus should be on enforcing existing laws rather than restricting markets.
I hope the CFTC will support well-regulated prediction markets that allow everyday Americans to participate. Please don't ban or overly restrict them. Craft rules that address specific risks while preserving the benefits these markets bring to society.
Sincerely,
Joseph Cole
