Comment Text:
I am a banking and finance attorney based out of Chicago. I am a regular trader on Kalshi and have been closely following their election contract lawsuit since its inception, and while I don’t use its markets for my profession, I felt the need to write a comment and speak about the ways in which the Commission’s proposed rules are overlooking the true use of these markets.
1. The proposed definition of gaming should be refined to clearly exclude activities that have substantial economic or commercial relevance. For example, staking something of value on the outcome of a political contest is not similar to gaming, as it involves significant research and analysis rather than mere chance.
2. Additional types of event contracts that should be explicitly identified include those related to major economic indicators and policy changes, as they have significant macroeconomic impacts and are not primarily for gambling purposes. Tax rates, such as corporate and capital gains tax rates, should be considered as macroeconomic measures.
3. Contracts involving political contests should not be categorized similarly to contracts involving war, terrorism, or unlawful activities, as they serve different purposes and do not have the same adverse public interest concerns.
4. Hedging and price-basing utility should be considered when evaluating whether a contract is contrary to the public interest. These utilities can be assessed by examining the contract's ability to provide risk management and price discovery benefits.
5. The proposed public interest determination for contracts involving gaming should consider whether the contract has substantial economic or commercial relevance, distinguishing between pure gambling and legitimate hedging activities.
Please consider the previous comments when making regulatory decisions. Thank you for your time and consideration.
Jay
