Comment Text:
Dear Chairman and Commissioners,
My name is Zain Passi, and I'm a student from California. I've been actively trading on prediction markets like Kalshi for a while now, and I'm 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 idea of regulating prediction markets in a fair and balanced way, rather than banning or overly restricting them.
As someone studying and engaging with markets, I see prediction markets as a valuable tool, not just for me but for society. They aren't gambling, no matter how some might label them. Trading on these platforms requires research, analysis, and real-world judgment, much like investing in stocks or commodities. I use Kalshi to make informed bets on events like economic data releases or policy outcomes, and the process has taught me a lot about how markets aggregate information. Academic research backs this up too, showing that prediction markets often predict outcomes more accurately than polls or experts. That kind of data transparency is a public good, and it's something we should encourage.
I also believe that regulated markets like Kalshi are far safer than the unregulated offshore platforms out there. If the CFTC bans or over-restricts these markets, people like me won't just stop trading. We'll get pushed to less secure, foreign sites with no oversight. Thats not consumer protection; its the opposite. Regulation under the CFTCs authority ensures transparency and accountability, and Id much rather trade in a legal, monitored space than a shady one. On that note, I think the CFTC already has strong tools to handle issues like manipulation or insider trading. Theres no need for heavy-handed bans when you can enforce the rules youve already got.
Im particularly drawn to Questions 7 and 15 from the ANPR. For Question 7, on balancing innovation and consumer protection, I think the US has a chance to lead in financial innovation here. If we over-regulate or shut down prediction markets, other countries will step in and take the lead. For Question 15, about defining gaming versus legitimate markets, I urge you to recognize that event contracts serve real economic purposes like price discovery and hedging. They arent just games; theyre tools for understanding the world.
I want the freedom to participate in legal, regulated markets without fear of them disappearing due to overly strict rules. Please consider proportionate regulation that addresses specific risks without punishing everyone. Lets keep prediction markets accessible, safe, and under US oversight.
Thank you for considering my perspective.
Sincerely,
Zain Passi
