Comment Text:
I strongly encourage the CFTC to allow Kalshi (or any other DCM that can offer Event Contracts) to offer a contract on Congressional control.
The entirety of Congress enacts laws which affect the lives of all Americans, yet any given American's vote is limited to two Senatorial offices and a single Representative's office. And most of us, like me, live in a congressional district where the outcome is predetermined by virtue of the partisan distribution of voters living within it.
I can vote for Democrats up and down the ticket, I can donate money to various candidates, I can volunteer for campaigns, and I can exercise my free speech in support of either party. But how can I hedge against the economic ramifications of my efforts falling short and the Republicans taking control of one or more houses of Congress?
I'm not a sophisticated Wall Street institution that can put together complex baskets of investment vehicles designed to go up or down if one or the other party comes into power. Yet my life like any other individual's is what's most directly impacted. If Republicans control congress the odds of the debt ceiling being breached go up, the odds of a disruptive government shutdown go up, the odds of various economic policies that would influence my life for the better likely go down.
An event contract allows me to hedge these risks. Yes - it would also be good to have specific event contracts for specific policy questions as well. But while no one knows exactly what laws will come out of a given congress, we DO know what the priorities of each political party are. Being able to hedge our exposure to which party is in control will allow me to generally decrease my risk to all negative economic policy outcomes that might result (in the short term) from divided government.
Event contracts are not just a tool for me to hedge; they will also allow me to assess the crowd-derived wisdom on which party will win in either chamber. It can be hard to figure out from breathless news coverage, social media bubbles, and esoteric Nate Silver models what the actual consensus opinion is on which party is going to win the election. An event contract distills all the noise into one simple signal: a price which directly reflects the probability of the event occurring.
Please let the public have this tool; both so that traders like me can hedge against future outcomes and so that the non-trading public can have a clear unbiased source of information about how the future might unfold.
