Comment Text:
Dear Chairman and Commissioners,
My name is Alec Mulcahey, and Im a trader and investor based in Alabama. Ive been actively trading on prediction markets like Kalshi for a while now, and Im writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I strongly support the development of well-regulated prediction markets, and I hope the CFTC will craft rules that encourage innovation while addressing real risks.
Ive found prediction markets to be incredibly valuable, both personally and for society at large. The forecasts they produce are often more accurate than polls or pundits. Ive seen this firsthand when trading on Kalshi, where the markets collective wisdom beats out so-called experts time and again. This isnt just helpful for traders like me, its useful information for everyone, from businesses to regular folks trying to make sense of the world. Plus, these markets arent gambling. They serve real economic purposes, like helping me hedge against uncertainties that affect my investments. It takes research and judgment, just like trading stocks or commodities.
Im also a firm believer that regulated markets are the way to go. Platforms like Kalshi, operating under CFTC oversight, are far safer than unregulated offshore alternatives. If the CFTC over-restricts or bans these markets, people wont stop trading, theyll just move to less safe venues outside U.S. jurisdiction. Thats a loss for American investors and for the countrys leadership in financial innovation. The U.S. should be at the forefront of new markets like these, not handing the advantage to other countries.
On the topic of informed trading, I think its a net positive. When knowledgeable participants trade, it improves price discovery, which benefits everyone in the market. Of course, insider trading is a concern, but its already illegal, and the CFTC has tools to address manipulation. Shutting down entire markets to stop a few bad actors doesnt make sense. Im particularly drawn to Question 29 from your ANPR, about whether informed traders help price discovery. My experience tells me they do, and punishing the whole market for potential misuse isnt the answer.
Lastly, I urge the CFTC to focus on proportionate, targeted regulation rather than broad categorical bans. Questions 7 and 15 in the ANPR, about balancing innovation with consumer protection and defining legitimate markets versus gaming, are critical. I believe event contracts have legitimate uses, and specific risks can be handled with tailored rules, not sweeping restrictions.
Prediction markets are a powerful tool for forecasting and hedging, and I hope the CFTC will support their growth with fair, practical regulations. Thank you for considering my input.
Sincerely,
Alec Mulcahey
