Comment Text:
Dear Chairman and Commissioners,
My name is Carlos Flores, and I'm a student from Washington state. I'm writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I've been actively trading on platforms like Kalshi, and I strongly support the development of well-regulated prediction markets in the United States.
As a student, I value the freedom to participate in legal, regulated markets like these. Prediction markets aren't just a hobby for me; they're a way to engage with real-world events and make sense of complex issues. I spend time researching economic trends, political developments, and even weather patterns to inform my trades. This isn't gambling, in my view. It takes analysis and judgment, much like trading stocks or other financial instruments. I believe event contracts serve real economic purposes, whether it's for price discovery or hedging against uncertainty. Labeling them as gaming feels like a misstep when they offer so much practical value.
I'm worried about what happens if the CFTC over-restricts or bans these markets. From what I've seen, banning doesn't make the activity disappear; it just pushes people to unregulated offshore platforms. Those sites don't have the oversight or consumer protections that a CFTC-registered platform like Kalshi provides. I've traded on Kalshi, and I feel safer knowing there's a regulatory framework behind it. If the U.S. clamps down, we'll lose that safety net, and regular people like me will have fewer trusted options. Worse, the U.S. risks falling behind. We should be leading in financial innovation, not handing that advantage to other countries where these markets might face less scrutiny.
I'd like to address a couple of specific questions from the ANPR. On Question 7, regarding balancing innovation and consumer protection, I think the CFTC can achieve both by focusing on proportionate rules that target specific risks like manipulation, rather than broad restrictions. And on Question 15, about defining gaming versus legitimate markets, I urge you to recognize that event contracts often have clear economic utility, distinct from pure chance-based activities.
I understand there are concerns about insider trading or market manipulation. But those issues are already illegal, and the CFTC has tools to address them. Shutting down or over-regulating prediction markets punishes everyone for the actions of a few bad actors. Let's not throw out a valuable tool just because it needs some guardrails.
I respectfully ask that the CFTC support proportionate regulation of prediction markets. Please don't ban or overly restrict them. Keep platforms like Kalshi accessible to people like me, under a framework that ensures safety and fairness while allowing the U.S. to stay at the forefront of financial innovation.
Thank you for considering my input.
Sincerely,
Carlos Flores
