Comment Text:
Dear Chairman and Commissioners,
My name is Jack Morsbach, and I'm a finance professional from Texas. I've been actively trading on prediction markets like Kalshi for a while now, and Im writing to express my strong 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, as well as to society at large, and I urge the CFTC to adopt a proportionate regulatory approach rather than imposing broad restrictions or bans.
As someone who works in finance, I rely on accurate data to make informed decisions. Prediction markets have consistently outperformed polls and pundits when it comes to forecasting elections and other public events. The aggregated wisdom of traders often reveals insights you just can't find elsewhere, and that benefits not only market participants but also the public and policymakers who need reliable information for decision-making. Ive personally used these markets to gain a clearer picture of election outcomes, which helps me advise clients on potential economic impacts. This kind of price discovery is a public good, and restricting access to it would be a step backward.
I also value the freedom to participate in legal, regulated markets. Platforms like Kalshi, operating under CFTC oversight, provide a safe and transparent environment for trading event contracts. These aren't gambling dens, they serve real economic purposes like hedging risks tied to public events. Ive hedged personal financial risks related to policy changes using these markets, and I know others who do the same. Classifying them as "gaming" undercuts their legitimate role in price discovery and risk management. Plus, banning or over-restricting these markets won't eliminate demand, itll just push activity to unregulated offshore platforms where consumer protections are nonexistent. Id much rather trade on a regulated U.S. market than take my chances overseas.
Addressing some of your specific questions, like those in Topic Area B on public interest (Questions 7-14), I believe the CFTC should prioritize innovation alongside consumer protection. The U.S. has a chance to lead in financial innovation, not cede ground to other countries. On Topic Area E regarding inside information (Questions 29-32), I think informed trading actually improves price discovery and benefits all participants, and existing CFTC tools to combat manipulation and insider trading are robust enough to handle risks without banning entire categories of contracts. Targeted rules make more sense than broad prohibitions.
I recognize concerns about manipulation or misuse, but the answer isn't to shut down these markets. Punishing law-abiding traders for the actions of a few bad actors doesn't solve anything. Instead, use the authority you already have to enforce against fraud and insider trading, and keep these markets accessible to everyday Americans like me.
I respectfully ask the CFTC to support proportionate regulation of prediction markets, ensuring they remain a safe, legal option for forecasting and hedging without over-restrictive bans. Thank you for considering my input.
Sincerely,
Jack Morsbach
