Comment Text:
Dear CFTC Board,
As a banking and finance attorney based in Chicago, I have been closely following the developments around Kalshi’s election contract lawsuit since its inception. While I do not use its markets for my professional work, I felt compelled to write to express my concerns about the Commission’s proposed rules, which seem to overlook the true utility and benefits of these markets.
The proposed definition of 'gaming' is overly broad and fails to distinguish between activities that have substantial economic or commercial relevance and those that are purely speculative. For example, staking something of value on the outcome of a political contest involves significant research and analysis, unlike gambling, which is based on chance.
Event contracts related to major economic indicators and policy changes should be explicitly identified as they have significant macroeconomic impacts. Contracts involving political contests should not be categorized similarly to those involving war, terrorism, or unlawful activities, as they serve different purposes and do not raise the same public interest concerns.
The hedging and price discovery utilities of these contracts are crucial for assessing their public interest. These contracts provide valuable tools for risk management and enhancing market transparency. Effective regulation should consider these benefits and aim to support market innovation while ensuring investor protection.
I urge the Commission to refine its approach and engage more actively with stakeholders.
