Prediction Markets Grow Fast While Watchdog Agency Shrinks

Prediction markets are getting bigger every day, letting people bet on nearly anything—from sports to elections to who will win the next reality show. But the government group supposed to keep an eye on these markets is getting smaller instead of bigger. Over the past few years, the agency in charge has lost nearly a quarter of its workers, dropping to its lowest numbers in 15 years. That means fewer people are around to spot suspicious bets or protect regular users from scams. Some of the most worrying cases involve trades that happened right before big news, like US military strikes. A soldier who took part in a raid on Venezuela’s leader made over $400, 000 betting on the operation before it even happened. The agency also has its hands full investigating oil market trades that came just before new rules on Iran were announced.The agency’s leader says AI tools are helping fill the gaps left by staff cuts. But experts worry that without enough people, important cases might get ignored or settled too quickly. Some cases now end with small fines instead of proper investigations, raising questions about whether the agency is doing its job right. Politicians from both sides are speaking up. Some want new laws to stop government workers from betting on things they know about from their jobs. Others are concerned that the agency’s leadership is too focused on cutting costs instead of doing the work it was made to do.