The short version
- Democratic senators have formally requested that the CFTC restrict betting on wildfire outcomes due to concerns that such markets may incentivize arson.
- Prediction platforms like Polymarket and Kalshi have seen significant wagering activity on recent fires, including over $1.2 million in bets related to the 2025 Los Angeles wildfires.
- The CFTC is already investigating Polymarket for prior regulatory violations, adding pressure on the agency to address emerging risks in climate-related prediction markets.
A coalition of Democratic senators from six states has issued a formal request to the Commodity Futures Trading Commission demanding stricter oversight of prediction market platforms that facilitate betting on wildfire outcomes. The lawmakers argue that allowing unrestricted wagering on when fires will be contained, how far they will spread, or which neighborhoods will be affected creates dangerous incentives for individuals to commit arson in order to secure financial gains.
The letter, sent earlier this week, names Oregon Senator Jeff Merkley, California Senators Adam Schiff and Alex Padilla, and Nevada Senator Catherine Cortez Masto among the signatories. They contend that the current regulatory framework fails to account for the unique ethical hazards posed by gambling on natural disasters, particularly as the United States contends with another record-breaking fire season. The senators have given the agency until August 14 to respond to a series of questions regarding whether these contracts serve the public interest.
Concerns about this emerging market trend are not new among experts. Ann Skeet, senior director of leadership ethics at Santa Clara University’s Markkula Center for Applied Ethics, supported the senators’ intervention, noting that offering bets on fire progression could practically motivate people to start fires. She emphasized that the real-world consequences of such financial instruments extend beyond abstract speculation, potentially endangering communities by creating monetary motives for destructive acts.
Recent data highlights the scale of activity on these platforms. During the devastating Palisades and Eaton fires in Los Angeles in early 2025, users on Polymarket wagered more than $1.2 million on various aspects of the disaster, including containment timelines and acreage burned. Jamie L. Pietruska, a historian at Rutgers University who tracked these predictions, noted that while informal weather gambling has existed for centuries, the speed and scale of modern digital platforms in a climate-changed world present novel challenges.
Newer platforms are also entering the space. A site called Wyldfyre, which describes itself as the first prediction market exclusively for California wildfires, has begun offering trades on future fire behavior. This specialization raises additional questions about how niche markets might amplify risks compared to broader prediction platforms that cover a wide range of events.
The regulatory landscape is already tense. The CFTC has launched multiple investigations into Polymarket, the world’s largest prediction market. In June, reports indicated the agency had begun a new inquiry earlier this year, marking its third investigation into the platform in recent years. Previously, in 2022, Polymarket was fined $1.4 million for operating in the United States without proper licensing.
Pietruska expressed approval of the senators’ call for regulation but criticized the timing, describing it as a year and a half late given the betting activity observed during the Los Angeles fires. She pointed to international precedents, such as police investigations at Charles de Gaulle airport in Paris, where unusual temperature readings on weather equipment coincided with suspicious winning bets on Polymarket, suggesting that manipulation of data or events for financial gain is a tangible risk.
Neither Polymarket nor the CFTC responded to requests for comment regarding the senators’ letter. The agency faces mounting pressure to establish guardrails that prevent individuals from profiting as wildfires threaten communities. As fires in Washington and Oregon continue to burn millions of acres and force tens of thousands to evacuate, the debate over whether financial speculation on disasters should be permitted remains unresolved.
The senators’ letter urges the CFTC to lead efforts to rein in these contracts both domestically and offshore. They argue that commonsense regulations are necessary to mitigate the risk of arson and ensure that prediction markets do not undermine public safety during an increasingly volatile fire season. The outcome of this regulatory push could set a precedent for how other climate-related disasters are treated in financial speculation markets.
What comes next depends on the CFTC’s response by mid-August. If the agency decides to restrict or ban wildfire betting, it would mark a significant shift in the regulation of prediction markets. Conversely, if no action is taken, critics argue that the door remains open for further ethical breaches and potential criminal activity linked to financial incentives for disaster outcomes.
Sources behind this briefing
Go to the original reporting
- The Guardian World↗US senators urge crackdown on wildfire betting amid warnings of arson risk
