Comment Text:
Dear CFTC Recipient,
I am writing to you as a market enthusiast and a recent college graduate who enjoys outdoor activities. I want to express my views on the importance of election contracts, awards shows and contests, and sports contracts in the regulated marketplace.
As someone who actively follows these markets, I believe event contracts are essential because they provide legal, regulated, and safe platforms for trading. These contracts allow individuals and businesses to hedge against risks and gain insights from market-generated 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 current interpretation undermines the potential benefits these contracts offer for risk management and market transparency. The election cop argument is not credible, and the definition of gaming is wrong and overbroad. Such interpretations will drive activity offshore and ignore valuable data that supports the utility of these contracts.
Additionally, I am concerned about the lack of engagement with stakeholders. Effective regulation requires a collaborative approach, and I urge the CFTC to engage more actively with stakeholders to understand the practical implications of these regulations. This includes considering comments, asking questions, and doing the hard work to understand these markets.
Therefore, I respectfully request the Commission to extend the comment period, hold a roundtable discussion, and vote no on the proposed event contract rule. These steps will allow for more comprehensive feedback from the industry and ensure that all perspectives are adequately considered.
In response to the CFTC's questions:
1. Additional types of event contracts that should be identified include contracts based on macroeconomic indicators such as tax rates (e.g., corporate and capital gains tax rates). These indices or measures are relevant for contracts that exist predominantly to enable gambling.
2. The Commission's proposed definition of the term 'gaming' should be reconsidered. Activities that constitute gaming should be clearly distinguished from legitimate hedging activities. Staking something of value on the outcome of a political contest is not similar to gaming and should not be treated as such.
3. Contracts involving political contests do not involve activities similar to war, terrorism, assassination, or activities unlawful under any Federal or State law. Therefore, these contracts should not be deemed contrary to the public interest.
4. Hedging and price-basing utility should be considered when evaluating whether a contract is contrary to the public interest. These utilities are crucial for assessing the legitimate economic purposes of the contracts.
5. Contracts involving terrorism, assassination, and war should be evaluated on a case-by-case basis to determine if they raise public interest concerns.
6. Contracts involving activities unlawful under federal or state law should be scrutinized to ensure they do not raise public interest concerns.
7. Contracts involving gaming should be evaluated to determine if they provide legitimate hedging utilities and should not be dismissed solely based on their association with gaming.
8. A 30-day effective date after the final rule amendments' publication may not provide sufficient time for compliance. A 60-day implementation period would be more appropriate to allow for the orderly cessation of trading in impacted event contracts.
In conclusion, event contracts serve a clear economic purpose and provide significant benefits to traders and the market. 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,
Dillon Kelly"
