Comment Text:
Dear Chairman and Commissioners,
My name is Lillian Carrabine, and I'm a trader and investor based in Texas. I've been actively trading on prediction markets like Kalshi for a while now, and I'm writing to share my 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 people like me, and to society at large, and I urge the CFTC to regulate them in a balanced way rather than imposing broad restrictions.
As a trader, I rely on prediction markets for information that I simply can't get elsewhere. The prices on platforms like Kalshi often predict outcomes for elections and other public events more accurately than polls or pundits. That helps me make better decisions, not just in trading but in planning for financial risks tied to policy changes. For instance, I've used these markets to hedge against potential tax or regulatory shifts that could impact my investments. It's not gambling, it's a tool for managing uncertainty, much like trading stocks or futures based on research and judgment.
I also value the freedom to participate in legal, regulated markets. Prediction markets let everyday people like me have a stake in understanding and forecasting major events. If only big institutions can play, the insights stay locked away with them. Opening these markets to regular traders makes the information more democratic and, frankly, more accurate. Plus, the academic research backs this up. Studies I've read show how these markets aggregate data efficiently, benefiting not just traders but the public and even policymakers who need better forecasts.
I do understand concerns about manipulation or insider trading, and I'm all for strong consumer protection. But the answer isn't to ban or over-restrict these markets. The CFTC already has tools to tackle bad actors, and those should be enforced. Driving activity to unregulated offshore platforms by over-regulating here in the US would be worse for everyone. I'm also worried that if we don't support innovation in this space, the US risks falling behind other countries. We should be leading in financial markets, not ceding ground.
On specific points from your ANPR, I'd like to address Questions 7 and 14 under Public Interest. I believe prediction markets serve the public good through price discovery and risk management, and they should be regulated proportionately to balance innovation with safety. Also, regarding Question 15 under Listed Activities, I strongly feel event contracts aren't gambling. They serve real economic purposes like hedging and informed decision-making.
I'm asking the CFTC to support prediction markets with targeted rules that address specific risks without broad categorical bans. Let's keep these markets accessible, safe, and innovative right here in the US.
Sincerely,
Lillian Carrabine
