Comment Text:
Dear Chairman and Commissioners,
My name is Diego Martinez, and I'm an everyday citizen from California 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, and I strongly support their continued operation under fair, proportionate regulation. I believe these markets offer unique value to people like me and to society as a whole, and Im concerned about overly restrictive rules that could limit access or push activity to less safe, unregulated platforms.
Ive always found prediction markets fascinating because they often predict outcomes better than polls or pundits. I remember checking a platform before the last election, and the markets forecast was way closer to the actual result than anything I saw on TV. That kind of accuracy isnt just interesting, its useful for everyone, not just traders. It helps regular people like me make sense of complicated events. Plus, these markets let everyday folks participate, which feels fair. If only big institutions could trade, all that valuable information would stay locked up with them. I think democratizing access is a strength, not a problem.
I also see real economic value in event contracts. Theyre not gambling, in my view. Trading on these platforms takes research and judgment, just like investing in stocks. Ive used them to think through risks that affect me personally, like how a policy change might impact my costs or job prospects. Theyre a tool for hedging real-world uncertainties, and I know businesses use them for similar reasons. Calling this "gaming" doesnt make sense to me when it serves such practical purposes. On this point, Id like to address Question 15 from your ANPR: event contracts should be defined by their economic utility, like price discovery and risk management, not lumped in with gambling.
Im not blind to the risks, like manipulation or insider trading. But the CFTC already has strong tools to tackle those issues in other markets, and I believe they can adapt those for prediction markets. Banning or over-restricting these markets isnt the answer. It would just push activity to unregulated offshore platforms, which are far less safe than a regulated market like Kalshi. Id rather see the US lead in financial innovation than cede that ground to other countries. Regarding Questions 29 and 30, I think informed trading actually helps price discovery and benefits everyone in the market. The focus should be on enforcing existing laws against insider trading, not shutting down entire markets.
I also want to highlight the academic research backing prediction markets. Studies show they aggregate information efficiently, and I believe the CFTC should consider this data when making rules. Transparency in how markets work would build trust for users like me.
In closing, I urge you to support proportionate, targeted regulation that addresses specific risks without broad bans. Let regular people like me keep participating in legal, regulated prediction markets. Thank you for considering my input.
Sincerely,
Diego Martinez
