Comment Text:
Dear Chairman and Commissioners,
My name is Nikolai Alexander, and I'm a trader and investor from California. 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 immense value, both to me personally and to society, and I urge the CFTC to adopt proportionate regulations rather than restrictive bans.
As a trader, I see prediction markets as similar to investing in stocks. Its about research, analysis, and judgment, using the same skills I apply to traditional markets. Unlike sports betting, where platforms might ban you for winning too much, Kalshi encourages participation and equips users with tools to make informed decisions. Prediction markets aren't gambling. They serve real economic purposes, like hedging risks and discovering prices for events that affect my finances, such as elections impacting tax policy or Fed decisions influencing mortgage rates. Ive used these markets to hedge personal financial risks, and I know businesses do the same for things like regulatory changes or tariff shifts.
I also value the forecasting power of prediction markets. Academic research consistently shows they outperform polls and pundits in predicting outcomes of elections and other public events. This isnt just useful for traders; its better information for everyone, from policymakers to the media. The price discovery process benefits from informed trading, which improves accuracy and helps the public make sense of complex events. Plus, having a regulated platform like Kalshi means Im not forced to turn to shady offshore alternatives, which lack oversight and consumer protections.
I understand concerns about manipulation or insider trading, but the CFTC already has strong tools to address these issues in other derivatives markets. Those same tools can work here. Banning or over-restricting prediction markets doesnt solve bad behavior; it punishes honest participants like me and pushes activity to unregulated offshore platforms. On specific questions in the ANPR, like those in Topic B on public interest (Questions 7-14), I believe the balance should favor innovation and access while protecting consumers through targeted rules. For Topic E on inside information (Questions 29-32), I think informed trading often improves price discovery, and existing laws already bar federal officials from abusing nonpublic data. Lets enforce those, not ban the markets.
The US should be a leader in financial innovation, not cede ground to other countries. Prediction markets are a gauge of public sentiment, just like traditional markets, and they democratize access to valuable information. I ask the CFTC to craft rules that address specific risks without broad categorical bans. Support proportionate regulation that keeps these markets safe, accessible, and thriving for traders like me.
Thank you for considering my views.
Sincerely,
Nikolai Alexander
