Comment Text:
Dear Chairman and Commissioners,
My name is Riley Strasser, and I'm a trader and investor based in Idaho. I've been actively trading on prediction markets like Kalshi for a while now, and Im writing to share my support for well-regulated prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets provide unique value to individuals like me and to society as a whole, and I hope the CFTC will craft rules that encourage their growth while addressing real risks with targeted solutions.
As a trader, I rely on prediction markets for two main reasons. First, they help me hedge personal and business financial risks. For instance, Ive used event contracts to offset potential losses tied to policy changes or economic data releases that could impact my investments. This isn't gambling; its a practical tool, much like trading futures or options to manage risk. Second, the information these markets provide is unmatched. I've seen firsthand how their forecasts often beat polls or pundit predictions. That accuracy helps me make better decisions, and I think its a public good for media, policymakers, and everyday folks to have access to this kind of aggregated insight.
I also want to highlight the academic research backing these markets. Studies by economists show theyre incredibly effective at aggregating information and producing transparent data. This isnt just theory; its proven. Classifying event contracts as "gaming" ignores this reality and the legitimate economic purposes they serve, like price discovery and hedging. I urge the CFTC to consider this when defining what constitutes gaming versus valid markets, as raised in Questions 15-22 of the ANPR.
Of course, I get the concerns about manipulation or insider trading. But the CFTC already has strong tools to tackle these issues in other derivatives markets. Why not adapt those for prediction markets instead of imposing broad bans? Im particularly drawn to Questions 29-32 on inside information. Informed traders often improve price accuracy, and punishing everyone for the actions of a few bad actors feels like overreach. Targeted rules to enforce existing laws on insider trading and manipulation make more sense to me than categorical restrictions.
Ive benefited from trading on regulated platforms like Kalshi, and I worry that overly restrictive rules could push activity to unregulated offshore markets, which helps no one. Proportionate regulation, as discussed in Questions 7-14 on balancing innovation and consumer protection, is the way to go. Keep the focus on specific risks without shutting down an entire industry.
In short, I ask the CFTC to support prediction markets with fair, targeted rules that recognize their economic value. Dont let broad bans or misclassifications stifle a tool thats useful for so many of us. Thank you for considering my input.
Sincerely,
Riley Strasser
