Comment Text:
Dear Chairman and Commissioners,
My name is Calvin Bacall, and I'm a trader and investor based in Michigan. I've been actively trading on prediction markets like Kalshi for a while now, and I'm writing to express my strong support for well-regulated prediction markets in response to your Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets provide real value to people like me, and I want to share why I think the CFTC should regulate them proportionately rather than impose overly restrictive rules or bans.
As a trader, I rely on prediction markets to hedge personal financial risks tied to events like elections, Federal Reserve decisions, or even inflation data releases. For example, Ive used Kalshi to offset potential impacts on my investments from policy changes that could affect my taxes or portfolio. This isn't gambling to me; its a practical tool for managing uncertainty, much like how I use other derivatives to hedge in traditional markets. I believe event contracts serve a legitimate economic purpose, and classifying them as "gaming" (as discussed in Questions 15-22) ignores their role in price discovery and risk management.
I also worry about what happens if these markets are over-restricted or banned. I've seen unregulated offshore platforms out there, and they're far less safe than a CFTC-registered market like Kalshi. If the U.S. pushes this activity underground or overseas, it hurts traders like me who want to participate in legal, transparent markets. Regulation, not prohibition, is the way to ensure consumer protection (as raised in Questions 7-14). Plus, the U.S. should be leading in financial innovation. We shouldn't cede this space to other countries by making it too hard for domestic markets to operate.
I'm aware of concerns about manipulation or insider trading (like in Questions 29-32), and I get why those are issues. But the CFTC already has tools to address bad actors in other markets, and those can work here too. Banning or heavily restricting prediction markets punishes honest participants like me instead of targeting the real problem. And academic research, which I've followed as a data-driven trader, shows these markets often produce more accurate forecasts than polls or pundits. Thats information we all benefit from, not just traders.
I urge the CFTC to support proportionate regulation that keeps prediction markets accessible on registered platforms. Lets keep this innovation in the U.S., protect consumers through oversight, and allow people like me the freedom to use these tools for hedging and informed decision-making. Please dont let over-restriction push this valuable activity offshore.
Thank you for considering my perspective.
Sincerely,
Calvin Bacall
