Comment Text:
Dear Chairman and Commissioners,
My name is Tyler Michalove, and I’m a trader and investor based in North Carolina. I’m writing to express my strong support for the proportionate regulation of prediction markets in response to the Advance Notice of Proposed Rulemaking on Prediction Markets (91 FR 12516). As someone who actively trades on platforms like Kalshi and Polymarket, I’ve seen firsthand the value these markets provide, and I believe the CFTC has a critical opportunity to foster innovation while protecting consumers.
I’ve built a trading operation focused on sports markets with Kalshi, and the presence of a limit order book has been a game-changer for price discovery, margin management, risk control, and transparency compared to traditional sportsbooks. Prediction markets aren’t just a niche hobby for me—they’re a tool that provides unique information I can’t get elsewhere. The prices reflect collective knowledge, often outperforming polls or pundits, which benefits not just traders like me but the broader public and policymakers who rely on accurate forecasts for decision-making.
I’m particularly concerned with the idea that event contracts might be misclassified as gambling. These markets serve real economic purposes, like hedging and price discovery, and require research and judgment—much like trading stocks or commodities. Treating them as gaming would undermine their value. On this point, I’d like to address Question 15 from the ANPR regarding the definition of gaming versus legitimate markets. Event contracts on platforms like Kalshi are not bets; they’re instruments that aggregate information and allow participants to manage risk.
I also believe regulated markets are far safer than unregulated offshore platforms. I’ve traded on both, and the transparency and oversight on a CFTC-registered platform like Kalshi make a world of difference. If overly restrictive rules push activity offshore, traders and the public lose the protections of U.S. regulation. This ties to Question 7 on balancing innovation and consumer protection—regulation should keep markets here, under CFTC oversight, rather than driving them abroad.
Moreover, the U.S. should lead in financial innovation, not cede ground to other countries. Prediction markets are a cutting-edge tool, and stifling them risks losing talent and capital to jurisdictions with more forward-thinking policies. In response to Question 29 on informed traders and price discovery, I’d argue that informed trading improves market accuracy, benefiting all participants by reflecting the best available data. The CFTC already has tools to address insider trading and manipulation; the focus should be on enforcing those, not banning markets.
I urge the CFTC to adopt a balanced approach that supports prediction markets with targeted rules to address specific risks, rather than broad restrictions. Let’s keep these markets regulated, transparent, and accessible to everyday traders like me while maintaining U.S. leadership in financial innovation.
Thank you for considering my input.
Sincerely,
Tyler Michalove
