Comment Text:
Dear Chairman and Commissioners,
My name is El BB, and I'm a trader and investor from West Virginia. I've been actively trading on prediction markets like Kalshi for a while now, and Im writing to support the proportionate regulation of these markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these platforms are valuable to people like me and to the broader economy, and I want to share why I think the CFTC should regulate them in a balanced way rather than banning or over-restricting them.
As someone who trades regularly, Ive seen firsthand how prediction markets provide insights you just cant get from polls or pundits. Their forecasts are often more accurate because they aggregate real money and real opinions from a wide range of people. This isnt gambling, its a legitimate way to assess probabilities on events that impact my investments and my life. I also use these markets to hedge risks, like political or economic outcomes that could affect my portfolio. For instance, trading on election outcomes or policy decisions helps me offset potential losses elsewhere. This is a practical tool, not a game.
Im particularly concerned about the idea of classifying event contracts as gaming. That label doesnt fit. These contracts serve real economic purposes like price discovery and risk management, much like traditional futures or stocks. Plus, trading on platforms like Kalshi, which is regulated, feels far safer than the alternative of offshore, unregulated sites. If the CFTC over-restricts or bans these markets, itll just push activity to those less safe venues. Id rather see the US lead in financial innovation and keep this activity under proper oversight here at home.
Regarding some of the specific questions in the ANPR, I want to address a few points. On Question 7 about balancing innovation and consumer protection, I think regulated markets like Kalshi already strike that balance by providing transparency and oversight while allowing everyday traders like me to participate. On Question 29 about inside information, I believe informed trading actually improves price discovery and benefits everyone in the market, as long as its not illegal insider trading. The CFTC already has robust tools to prevent manipulation and insider trading in other derivatives markets, and those can be applied here without broad bans. And on Question 15 about defining gaming, I urge you to recognize that these contracts arent games of chance but tools for serious economic activity.
I understand there are concerns about manipulation or bad actors, but banning entire markets isnt the answer. It punishes law-abiding traders like me and drives activity offshore. Instead, I ask the CFTC to focus on targeted, proportionate rules that address specific risks while preserving my freedom to participate in legal, regulated markets. Lets keep the US at the forefront of financial innovation.
Thank you for considering my input.
Sincerely,
El BB
