Comment Text:
Dear Chairman and Commissioners,
My name is Matthew Morataya, and I'm a student from Oregon writing to share my thoughts on the Advance Notice of Proposed Rulemaking on Prediction Markets, as published in 91 FR 12516. I've used prediction markets a few times myself, and I strongly support their role in our economy when regulated properly. I believe these markets provide unique value to individuals like me, to businesses, and to society as a whole, and I hope the CFTC will craft rules that encourage innovation while addressing real risks.
As a student, Im fascinated by how prediction markets aggregate information to produce forecasts that are often more accurate than polls or pundits. Ive seen firsthand how platforms like Kalshi, operating under CFTC oversight, offer insights into elections and public events that I cant get anywhere else. This isnt just useful for traders; it helps everyone, from journalists to policymakers, make better decisions with better data. Beyond that, I value the freedom to participate in these legal, regulated markets. They let regular people like me engage with real-world events in a meaningful way, and I think that democratizes information in a powerful sense.
I also see prediction markets as tools for hedging real financial risks. For example, a small business owner might use them to manage uncertainty around policy changes, or someone like me could offset risks tied to economic events affecting student loans or job prospects. These arent games; they serve legitimate economic purposes, and classifying event contracts as gaming ignores their utility. Im concerned that banning or over-restricting these markets would push activity to unregulated offshore platforms, which lack the consumer protections of CFTC-registered markets like Kalshi. The U.S. should be leading in financial innovation, not ceding ground to other countries.
Regarding some of the specific questions in the ANPR, Id like to address Question 7 on balancing innovation and consumer protection, and Question 15 on defining gaming versus legitimate markets. On the first, I believe proportionate, targeted regulation is the answer. The CFTC already has robust tools to prevent manipulation and insider trading in other derivatives markets; those can be adapted here without broad categorical bans. On the second, event contracts arent gambling when they facilitate price discovery and hedging. Informed trading actually improves accuracy, benefiting all participants. As for insider concerns raised in Questions 29-32, existing laws already prohibit federal employees from trading on nonpublic information, and the CFTC can enforce against manipulation without shutting down entire markets.
I urge the CFTC to support well-regulated prediction markets that foster transparency, protect consumers, and keep the U.S. competitive. Please focus on targeted rules that address specific risks rather than broad restrictions that hurt regular users like me. Thank you for considering my perspective.
Sincerely,
Matthew Morataya
