Comment Text:
Dear CFTC Recipient,
I am writing to you as an entrepreneur interested in prediction markets and how they might be used to improve decision making more broadly in the economy to express my views on the importance of election contracts in the regulated marketplace.
As someone involved in the entrepreneurial ecosystem, dealing with uncertainty is common, and prediction markets are an innovative approach to understanding uncertainty and should be nurtured, not squashed.
As someone who believes in the legality, regulation, and safety of event contracts, I believe these contracts are essential because they offer a structured and transparent way to manage risk and gather valuable information. These contracts provide a legal and regulated environment where participants can engage without fear of manipulation or fraud, thereby enhancing market integrity and trust.
Furthermore, regulated activity in this space ensures that markets generate valuable information. This regulation not only secures the market but also allows for partnerships with reputable institutions, such as the recent collaboration between Kalshi and Susquehanna International Group, enhancing market liquidity and confidence.
In light of the recent proposals by the CFTC, I would like to highlight that the election cop argument is not credible, and the current interpretation undermines the potential benefits these contracts offer for risk management and market transparency. The definition of gaming as proposed is wrong and overly broad, and it will drive activity offshore, ignoring substantial data that supports the positive impact of these contracts.
Additionally, I am concerned about the CFTC's approach. Effective regulation requires a collaborative approach, and I urge the CFTC to do the hard work to understand these markets, engage more actively with stakeholders, consider comments, and ask questions to grasp the practical implications of these regulations.
Therefore, I respectfully request the Commission to extend the comment period, hold a roundtable discussion, and vote no on the proposed event contract rule to allow for more comprehensive feedback from the industry and ensure that all perspectives are adequately considered.
In response to the CFTC's questions, I believe that tax rates such as corporate and capital gains tax rates should be included among macroeconomic measures. Furthermore, staking something of value on the outcome of a political contest should not be considered similar to gaming. The potential for hedging and price-basing utility should be significant factors in evaluating whether a contract is contrary to the public interest.
In conclusion, election contracts are a valuable tool for risk management and market transparency. I appreciate your attention to this matter and look forward to a constructive dialogue on how best to regulate these essential contracts.
Thank you for your consideration.
Sincerely,
Doug Richardson"
