Comment Text:
Dear Chairman and Commissioners,
My name is Matthew Montijo, and I'm a trader and investor based in Arizona. I've been actively trading on prediction markets like Kalshi for a while now, and Im writing to express my strong support for well-regulated prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). I believe these markets provide unique value to people like me, and I want to share why I think the CFTC should support their growth with balanced regulation, not heavy-handed restrictions.
As a trader, I value the freedom to participate in legal, regulated markets. Platforms like Kalshi give me a way to engage with real-world events, from elections to economic indicators, in a way that feels more grounded than traditional investments at times. This isn't gambling, despite what some might say. Trading on event contracts takes research and judgment, just like trading stocks or futures. These markets serve a real economic purpose by letting me hedge risks, like how a policy change might impact my investments, and they provide information you can't get from polls or news. I've seen firsthand how prediction market prices often cut through the noise and offer clearer signals about what's likely to happen.
Im also concerned about U.S. competitiveness in financial innovation. If the CFTC over-restricts or bans certain event contracts, it risks pushing activity to unregulated offshore platforms. I've looked at some of those alternatives, and theyre nowhere near as safe or transparent as a CFTC-registered market like Kalshi. Regulation here keeps consumers like me protected with clear rules and oversight. If you clamp down too hard, you're not stopping the activity, just driving it out of reach of your authority. The U.S. should be leading in this space, not ceding ground to other countries.
On the topic of risks, I know the CFTC is worried about manipulation and insider trading, as raised in questions 29 through 32 of the ANPR. I get that concern, but the agency already has strong tools to tackle those issues in other derivatives markets. Those same tools can work here. Plus, informed trading actually helps price discovery, which benefits everyone in the market, not just the traders. Banning or over-restricting these markets to stop a few bad actors feels like punishing the rest of us who play by the rules.
I urge you to focus on proportionate regulation that addresses specific risks without stifling innovation or pushing activity offshore. Please consider questions 7 through 14 on balancing innovation and consumer protection, and ensure that regular traders like me can keep accessing these valuable tools on regulated platforms. Prediction markets are a net positive, and with the right oversight, they can thrive safely.
Thank you for considering my input.
Sincerely,
Matthew Montijo
