Comment Text:
Dear Chairman and Commissioners,
My name is Matthew Mittelsted, and I'm a trader and investor based in Utah. I've been actively trading on prediction markets like Kalshi for a while now, and Im writing to support well-regulated prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets provide real value to people like me, and I want to share why I think the CFTC should regulate them proportionately rather than impose heavy restrictions or bans.
As a trader, Ive found prediction markets to be an incredible tool. Theyre not just a way to speculate; they help me hedge real risks in my financial life. For instance, Ive used Kalshi to manage uncertainty around election outcomes that could impact my investments or tax planning. This isnt gambling. It takes research and judgment, much like trading stocks or commodities. Classifying event contracts as gaming (as discussed in Questions 15-22) ignores their legitimate economic purpose. Theyre about price discovery and risk management, not luck.
I also value the freedom to participate in legal, regulated markets. Platforms like Kalshi, operating under CFTC oversight, are far safer than unregulated offshore alternatives. If the CFTC over-restricts or bans these markets, activity will just move to less transparent venues where theres no consumer protection. Id rather see the US lead in financial innovation than cede that ground to other countries. On that note, regarding Questions 7-14 about public interest, I believe supporting innovation while ensuring oversight strikes the right balance.
Another point I care about is how informed trading actually improves price discovery, benefiting everyone, not just traders. Academic research backs this up, showing prediction markets often outperform polls or pundits. Addressing Questions 29-32 on inside information, Id argue that the CFTC already has robust tools to tackle manipulation and insider trading in other derivatives markets. Use those tools here instead of broad bans. Punishing all participants for the actions of a few bad actors doesnt make sense.
Finally, I urge proportionate regulation over categorical restrictions. Targeted rules to address specific risks, like manipulation, are better than shutting down entire market segments. Banning prediction markets wont stop demand; itll just push people like me to riskier platforms. I want to stay in a regulated space where theres accountability and data transparency.
Thank you for considering my input. I strongly support the CFTC crafting rules that allow prediction markets to thrive under fair oversight, ensuring consumer protection without stifling innovation or access.
Sincerely,
Matthew Mittelsted
