Comment Text:
Dear Chairman and Commissioners,
My name is Michael Chermak, and I'm a trader and investor based in New York. I've been actively trading on prediction markets like Kalshi for a while now, and Im writing to express my strong support for the proportionate regulation of these markets as outlined in the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe prediction markets provide unique value to society, and I want to share my perspective as someone who uses them regularly.
One of the main reasons I value prediction markets is their ability to produce forecasts that are often more accurate than traditional polls or pundit opinions. I've seen this firsthand while trading on Kalshi, especially during election cycles. The market prices on outcomes, whether it's a presidential race or a key policy decision, cut through the noise of biased commentary and outdated surveys. For example, during the last election, I noticed the market odds on certain swing states shifted days before any poll reflected the same trend. That kind of real-time insight isn't just useful for traders like me, its valuable for anyone trying to understand whats really happening. I think this forecasting power benefits the public, journalists, and even policymakers who need reliable data to make decisions.
I also want to push back on the idea that these markets are just gambling. Trading on prediction markets requires research, analysis, and judgment about real-world events. Its no different from the skills I use when investing in stocks or commodities. If we label this as "gaming," we might as well label all investing the same way. Plus, these markets democratize access to information. If only big institutions could participate, the insights would stay locked up with them. Letting regular folks like me trade makes the prices sharper and fairer for everyone.
Im aware of the concerns about insider trading or manipulation, and I get why those are issues. But banning or over-restricting prediction markets isnt the answer. Laws already exist to stop federal employees or anyone else from trading on nonpublic info, and the CFTC already has tools to tackle manipulation in any regulated market. Shutting down these platforms to stop a few bad actors punishes honest traders and deprives society of the benefits. In response to Questions 29 and 30 from the ANPR, Id argue that informed traders often improve price discovery, and the focus should be on enforcing existing rules, not creating broad prohibitions.
I urge the CFTC to support well-regulated prediction markets that allow innovation while addressing specific risks with targeted rules. Dont let overregulation push this valuable tool offshore or underground. Thank you for considering my input.
Sincerely,
Michael Chermak
