Comment Text:
Dear Chairman and Commissioners,
My name is Fabian Garcia, and I'm a trader and investor based in Nebraska. I've been actively trading on prediction markets like Kalshi and Polymarket for a while now, and I'm writing to support the proportionate regulation of these 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, as well as to society at large, and I want to share why I think the CFTC should encourage their growth under a sensible regulatory framework.
As a trader, I've seen firsthand how prediction markets help individuals and businesses manage real financial risks. For example, I run a small investment portfolio, and I've used event contracts to hedge against uncertainties like election outcomes that could impact tax policies or market regulations affecting my holdings. This isn't gambling; it's a practical tool, much like trading futures or options to protect against price swings. I also rely on the forecasts these markets produce. Time and again, platforms like these have outperformed polls and pundits in predicting election results or economic events. That kind of information is invaluable, not just to traders, but to anyone making decisions based on future expectations.
I'm also concerned about where trading goes if regulation becomes too restrictive. I've traded on both regulated platforms like Kalshi and offshore ones like Polymarket. There's no comparison; regulated markets are safer, more transparent, and provide better consumer protections. Push too hard with bans or overly tight rules, and people will just move to unregulated offshore sites where theres no oversight at all. Thats not good for anyone. On the flip side, allowing informed trading on regulated platforms improves price discovery. When knowledgeable participants trade, the prices reflect better information, and that benefits everyone, not just those in the market.
Id like to address a few of your specific questions from the ANPR. On Question 7 under Public Interest, I strongly believe prediction markets serve the public good by providing accurate forecasts and risk management tools, outweighing the risks if properly regulated. For Question 29 under Inside Information, I think informed traders actually help the market by making prices more accurate, as long as existing laws against insider trading are enforced. And on Question 15 under Listed Activities, I urge the CFTC not to classify event contracts as gaming. They serve legitimate economic purposes, like hedging and price discovery, and shouldn't be lumped in with gambling.
I want the freedom to participate in legal, regulated markets without fear of overreach. The U.S. has a chance to lead in financial innovation, and prediction markets are part of that. Please dont ban or over-restrict them. Instead, focus on targeted rules that address specific risks while allowing these markets to grow. Thank you for considering my input.
Sincerely,
Fabian Garcia
