Nine Democratic senators have asked the CFTC to review prediction-market contracts tied to wildfires, warning such bets could incentivize arson or efforts to keep fires burning. They cited roughly $1.2 million wagered on Polymarket during January’s Palisades and Eaton fires, which killed 31 people and destroyed more than 16,000 buildings. Survivors and some platforms condemned wildfire markets, while Polymarket argues removing them could limit access to information. The senators requested a formal response from the CFTC by August 14.
Senators Say Wildfire Betting Could Encourage Arson as Record Blazes Rage
Prediction market betting may influence arson as several states see unprecedented wildfires, Senators warn
A group of nine Democratic U.S. senators has warned that prediction markets allowing wagers on wildfires could create incentives for arson and other dangerous behavior, as several states confront an unusually severe fire season. In a letter sent to Commodity Futures Trading Commission (CFTC) Chair Michael Selig, the lawmakers urged regulators to scrutinize whether markets tied to natural disasters serve the public interest.
The senators raised concerns about the rapid expansion of prediction markets — platforms where users buy and sell contracts that pay out based on future events — and the possible harms that arise when those contracts reference destructive events such as wildfires. They argued such markets risk encouraging individuals to start or sustain fires to protect bets and could create opportunities for insider trading and public-safety threats.
A coalition of Democratic US senators has warned that betting on wildfires may increase the risk of arson as several states see unprecedented blazes (AFP via Getty Images)
"Offering bets on destructive wildfires threatens to minimize communities' suffering all so the rich and powerful can profit," the senators wrote. "There's also the heightened risk—according to state and local fire officials—that individuals could be tempted to commit arson in order to make sure their bets are successful."
The letter specifically cited reporting about wagers on the platform Polymarket during the Palisades and Eaton fires in Southern California in January 2025, when users reportedly spent about $1.2 million on contracts tied to how many acres the blazes would burn and when containment would occur. Polymarket told CNN that while it recognizes the risks, removing markets could limit access to timely probabilistic information.
Other platforms differ: a Kalshi spokesperson told The Independent that Kalshi does not permit markets tied to wildfires because "they create perverse incentives." Survivors and local officials have condemned wagering on active disasters as morally objectionable and potentially harmful. Sylvie Andrews, who said she lost her Altadena home in the Eaton Fire, called the practice "morally reprehensible."
As the Palisades and Eaton fires raged through Southern California in January 2025, people reportedly spent $1.2 million on Polymarket betting on them (Getty Images)
The Palisades and Eaton fires together killed 31 people and destroyed more than 16,000 buildings, underscoring the human cost behind the debate. Lawmakers warned that listing contracts tied to ongoing fires could also encourage people to interfere with fires already burning — for example, by preventing containment efforts — which would heighten public-safety risks.
The letter was signed by Senators Jeffrey Merkley and Ron Wyden of Oregon; Alex Padilla and Adam Schiff of California; Jeanne Shaheen of New Hampshire; Jacky Rosen and Catherine Cortez Masto of Nevada; Martin Heinrich of New Mexico; and Amy Klobuchar of Minnesota. The senators requested answers from the CFTC by August 14 about whether the agency believes such markets serve the public interest and whether it has any guidance or enforcement plans related to betting on natural disasters.
There were reportedly 49 fires actively burning in Oregon and Washington Wednesday (AFP via Getty Images)
The senators also noted the broader context of the season: Portland outlet KATU reported that 49 fires were actively burning across Oregon and Washington on a recent Wednesday, and that Oregon’s five largest fires had consumed roughly 1.2 million acres. In Spokane, Washington, authorities arrested 37-year-old Aaron F. Farinacci on suspicion of first-degree arson in connection with the Old Trails Fire; officials have not publicly stated a motive.
The Independent has reached out to the CFTC and Polymarket for comment. The debate raises difficult questions about the balance between open information, market innovation and public safety during disasters that threaten lives and communities.
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