Comment Text:
I have studied the role of predictive markets in enhancing market efficiency and transparency. Election contracts, like those offered by Kalshi, provide significant value in terms of price discovery and risk management, particularly in the context of political events such as elections. These contracts allow market participants to hedge against potential risks associated with political outcomes, which can have far-reaching economic consequences. They offer a regulated and transparent environment for assessing market expectations, providing valuable insights into market dynamics and participant behavior.
The proposed restrictions on election contracts by the CFTC would undermine the progress made in this field and limit the availability of valuable data. These contracts are not speculative tools; they are legal, regulated, and offer a structured environment for risk management and price discovery. Restricting them would drive this activity to unregulated markets, increasing risks and reducing the quality of available data. Effective regulation should support innovation and market development while ensuring investor protection.
