Key facts
- Nine Democratic senators have urged the CFTC to ban prediction market contracts tied to wildfires.
- Concerns include potential incentives for arson, insider trading, and profiting from natural disasters.
- Polymarket reportedly accepted over $1.2 million in bets on California wildfires.
- The senators requested the CFTC implement regulatory guardrails by August 14.
- The CFTC previously fined Polymarket $1.4 million in 2022 for operating without a U.S. license.
Nine Democratic senators have formally requested that the Commodity Futures Trading Commission (CFTC) take action to regulate prediction market platforms that allow users to bet on the outcomes of wildfires. The lawmakers expressed significant concern that such platforms could create incentives for individuals to commit arson in order to profit from their bets.
The senators, including Jeff Merkley (D-Ore.), Adam Schiff (D-Calif.), Alex Padilla (D-Calif.), and Catherine Cortez Masto (D-Nev.), highlighted the growing trend of betting on wildfire events. They pointed to reports that Polymarket accepted more than $1.2 million in bets tied to California's Palisades and Eaton fires in 2025, and cited newer platforms that let users bet on wildfires, arguing the markets encourage people to speculate on destructive events.
Polymarket stated that it does not profit from outcomes and that removing these markets makes accurate information less accessible. A spokesperson noted that Polymarket does not currently have any markets on wildfires. Wildfire experts, however, expressed dismay, with one professor stating such markets could create perverse incentives for arson. Riva Duncan, president of Grassroots Wildland Firefighters, called the markets "beyond comprehension."
The senators argued the CFTC should rein in wildfire betting before the start of next year's wildfire season, urging the agency to lead the charge to put in place common-sense guardrails to prevent people from profiting as wildfires threaten communities. The letter comes as prediction markets face increasing scrutiny from lawmakers and regulators, with states like Minnesota banning them and legal challenges arising over their regulation. The CFTC has previously fined Polymarket $1.4 million in 2022 for operating without a license in the U.S.