Comment on CFTC-2026-1189, CFTC-2026-1189-0001, Kyutaro, Matsuzawa

July 20, 2026 Kyutaro Matsuzawa Assistant Professor San Diego State University, Economics Department 5500 Campanile Drive San Diego, CA 92182-4485 Nasatir Hall 315 RE: Commodity Futures Trading Commission Prediction Markets; Public Interest Determinations RIN 3038-AF65 Dear Commodity Futures Trading Commission, Thank you for the opportunity to comment on prediction markets. I am an assistant professor of economics at San Diego State University. I currently work on a few research projects related to the impact of sports betting legalization and have a paper forthcoming in the Review of Economics & Statistics exploring its effect on intimate partner violence. As prediction markets expand, I recommend that the agency distinguish between prediction markets based on emotionally salient events and those based on relatively impersonal events, and consider restricting contracts tied to the former. This recommendation would mitigate potential harms while preserving the broader benefits of the prediction market. In my previous study, forthcoming in the Review of Economics & Statistics (Arnesen and Matsuzawa 2026), we examine how legal sports betting affects emotional responses to unexpected outcomes of football games. We build on and expand a seminal paper (Card and Dahl 2011) that finds that an unexpected loss by a fan’s favorite team increases emotional distress and the risk of intimate partner violence. We find that once fans are allowed to wager on sporting events, unexpected losses generate larger increases in emotional distress and intimate partner violence. The findings from our paper suggest that wagering on sporting events can amplify the psychological impact of game outcomes. Although our study focuses on intimate partner violence, the underlying mechanism likely generalizes to other downstream outcomes. Emotional responses to salient events have been shown to negatively affect a range of outcomes, including other types of crime such as assaults, drunk driving, motor vehicle thefts, and vandalism (Ge et al. 2021; Rees and Schnepel 2009) These dynamics suggest that regulators should weigh the broader emotional consequences of allowing individuals to wager on personally salient events. This mechanism is unlikely to be unique to sporting events. Whenever individuals have strong personal or emotional investments in an uncertain outcome, adding financial stakes may further amplify their emotional responses. Prior research has documented that emotionally charged events—including elections and severe traffic congestion—can increase the incidence of intimate partner violence (Beland and Brent 2018; Collins 2026). Allowing individuals to place financial stakes on these events could plausibly amplify these emotional responses and their associated social harms. Accordingly, regulators should exercise particular caution when considering prediction markets based on events that are likely to evoke strong emotional reactions, such as elections or other highly consequential public events. Sincerely, Kyutaro Matsuzawa References Arnesen, E., & Matsuzawa, K. (2026). Sports betting legalization amplifies emotional cues and intimate partner violence. Review of Economics and Statistics, 1-39. Beland, L. P., & Brent, D. A. (2018). Traffic and crime. Journal of Public Economics, 160, 96-116. Card, D., & Dahl, G. B. (2011). Family violence and football: The effect of unexpected emotional cues on violent behavior. The Quarterly Journal of Economics, 126(1), 103-143. Collins, C. (2026). Emotional cues, election outcomes, and intimate partner violence. Eastern Economic Journal, 52(1), 107-135. Ge, Q., Sarmiento Barbieri, I., & Schneider, R. (2021). Sporting events, emotional cues, and crime: Spatial and temporal evidence from Brazilian soccer games. Economic Inquiry, 59(1), 375-395. Rees, D. I., & Schnepel, K. T. (2009). College football games and crime. Journal of Sports Economics, 10(1), 68-87.