Democratic senators from six states have called on the Commodity Futures Trading Commission (CFTC) to rein in prediction markets that allow betting on wildfires, warning that such bets could incentivize arson. The letter, sent this week, urges the CFTC to consider whether these contracts are in the public interest.
Lawmakers' concerns
The senators, including Jeff Merkley of Oregon, Adam Schiff and Alex Padilla of California, and Catherine Cortez Masto of Nevada, expressed alarm over platforms like Polymarket and Kalshi. They said the practice poses a risk that "individuals could be tempted to commit arson in order to make sure their bets are successful."
The letter gives the CFTC until 14 August to respond to a list of questions, demanding "commonsense guardrails to prevent people from profiting as wildfires threaten communities."
Rising trend in wildfire betting
Recent reporting has highlighted the growing market for wildfire bets. During the Palisades and Eaton fires in Los Angeles in early 2025, Polymarket allowed users to bet on containment dates, fire spread, and acreage burned. Wagers on the LA fires exceeded $1.2 million, according to Jamie L Pietruska, a historian at Rutgers University.
This summer, a site called Wyldfyre has offered trades on "what fire does next," branding itself as the "first prediction market for California wildfire."
Expert backing
Ann Skeet, senior director of leadership ethics at Santa Clara University's Markkula Center for Applied Ethics, commended the senators' demands. "Somebody could place a bet and then be motivated to actually start a fire," she said, highlighting the practical risks.
Pietruska welcomed the call but noted it was "year and a half late" after the Polymarket bets on the LA fires. She pointed to the "speed and scale" of such platforms in a "climate-changed world," referencing police investigations into suspicious temperature readings at Charles de Gaulle airport that coincided with winning Polymarket bets.
Regulatory backdrop
The CFTC has already launched several investigations into Polymarket, the world's largest prediction market. The Wall Street Journal reported in June that the agency began investigating the platform earlier this year, marking its third inquiry in recent years. In 2022, Polymarket was fined $1.4 million for operating without a license in the US.
Neither Polymarket nor the CFTC responded to requests for comment.
