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According to reporting by Barron’s, the Chicago enforcement division of the Commodity Futures Trading Commission (CFTC) — long considered the regulator’s top litigation hub — has gone from roughly 20 trial attorneys to effectively none after the final attorney’s departure this week. Barron’s described the office as having “become a ghost town,” citing people familiar with the division.

The staffing cuts come at a sensitive moment for the agency. Event contracts and prediction markets offered by platforms such as Kalshi and Polymarket have seen rapid growth over the past year, with billions of dollars flowing into contracts tied to elections, sports outcomes, and other real-world events.

The CFTC serves as the primary federal regulator for those contracts.

Enforcement Collapse as Oversight Needs Grow

Most separations in the Chicago office were voluntary, tied to early retirement offers. But the impact on enforcement output appears significant.

The staff drop led to a sharp decline in agency activity:

• Fiscal 2024: 58 enforcement actions and a record $17.1 billion in monetary relief
• Fiscal 2025: 13 actions resulting in less than $10 million

Chicago is historically the CFTC’s frontline office for complex market manipulation and derivatives cases. The division once handled marquee crypto matters, including multi-billion-dollar settlements tied to Binance and FTX.

Now, according to people familiar with the matter, the last remaining trial attorney resigned Monday, leaving the office without any trial lawyers.

David Slovick, a former Chicago enforcement attorney, told the outlet:

“Chicago is the spiritual home of the futures markets; it’s where it all began. To wipe out the enforcement staff in a place like Chicago sends a very bad signal to market participants about whether the government is watching what they’re doing and whether or not they have to abide by the law.”

Another former official offered a blunter assessment:

“If I was a different person, I would launch a crypto scam right now, because there’s no cops on the beat.”

Why This Matters for Prediction Markets

For the gaming and betting sector, the staffing shift isn’t just an internal HR story.

Prediction markets are structured as commodity- or futures-style event contracts, meaning they fall squarely under the CFTC’s jurisdiction. The same enforcement teams that pursue futures manipulation and crypto derivatives fraud also investigate insider trading and integrity risks on event platforms.

At the same time, the agency’s workload may soon expand.

Last year, the U.S. House of Representatives passed legislation that would place most oversight of cryptocurrency under the CFTC rather than the SEC. The bill currently awaits action in the Senate.

Former CFTC attorneys told Barron’s the division could be “woefully understaffed” if that occurs. That scenario could affect how the agency supervises prediction markets.

Policy Focus Shifts Toward Market Development

The enforcement squeeze also comes as CFTC leadership signals a more accommodating stance toward prediction markets themselves.

Since stepping into the position in late December, Chair Mike Selig has publicly backed expanding event contracts and called for modernizing the regulatory framework governing them, emphasizing clearer rules and jurisdiction rather than aggressive litigation.

That posture marks a tonal shift from traditional “regulation by enforcement” and suggests agency resources may be flowing toward policy and rulemaking even as trial attorneys exit the Chicago office.

The contrast — fewer prosecutors and more market development — raises questions about whether the CFTC can effectively police the very markets it is promoting.

States Trying to Fill the Enforcement Gap

The workforce reduction comes amid ongoing legal battles between state regulators and prediction market platforms.

Several states, including Nevada, Massachusetts, New York, Ohio, and New Jersey, have moved to restrict or challenge sports-event contracts offered by platforms such as Kalshi, Polymarket, Robinhood, and Crypto.com. Regulators argue that these contracts resemble traditional sports betting, which requires state licenses.

The platforms, in turn, have argued that federal law preempts state gambling statutes and have filed lawsuits against the states. Some recent rulings have favored the states, while earlier decisions sided with operators, leaving the legal landscape unsettled.

The CFTC has done little to intervene or give guidance on the matter. In his confirmation hearing, Selig indicated that he will let the courts decide. And with the agency’s enforcement bench being extremely thin, more states may feel increasingly pressured to step in, potentially accelerating cease-and-desist actions or litigation.

Many legal experts expect the dispute to persist, with the possibility that the issue ultimately reaches the U.S. Supreme Court.

A Critical Moment for The “Cop on the Beat”

At his confirmation hearing, Selig acknowledged the strain on resources, telling senators:

“It is vitally important we have a cop on the beat.”

For prediction markets, that question is no longer rhetorical. Trading volumes are steadily climbing, especially around sports event contracts, and integrity concerns — from insider information to market manipulation — are drawing closer scrutiny.

At the same time, the federal enforcement office historically tasked with policing derivatives now appears dramatically smaller than it was a year ago. The CFTC leadership is also understaffed, with Selig being the only Commissioner on a typically five-person Commission.

As Barron’s reporting suggests, the regulatory footprint may be shrinking just as the market it oversees is expanding. For operators, investors, and policymakers alike, that imbalance could shape how aggressively prediction markets are supervised in the year ahead.