Key facts
- US senators are calling for a crackdown on prediction markets that allow betting on wildfires.
- Concerns have been raised that these platforms could increase the risk of arson.
- The senators sent a letter to the CFTC chair urging regulatory action.
- Examples of wildfire betting include markets on containment dates, spread to neighborhoods, and acreage burned.
- The CFTC has a history of investigating and fining Polymarket, a major prediction market platform.
A coalition of U.S. senators has 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-OR), Adam Schiff (D-CA), Alex Padilla (D-CA), and Catherine Cortez Masto (D-NV), highlighted the growing trend of betting on wildfire events. They pointed to instances where platforms like Polymarket offered markets on wildfire containment dates, spread, and acreage burned, with millions of dollars wagered on events like the Palisades and Eaton fires in Los Angeles in early 2025. A site called Wyldfyre has also emerged, focusing exclusively on California wildfire predictions.
Experts, such as Ann Skeet from Santa Clara University's Markkula Center for Applied Ethics, echoed these concerns, stating that offering bets on wildfire progression could motivate arson. Historian Jamie L Pietruska noted that while informal weather betting has existed for centuries, the speed and scale of modern prediction markets in a changing climate are particularly worrying. She also mentioned ongoing police investigations into suspicious Polymarket bets coinciding with unusual temperature readings at Charles de Gaulle airport.
The CFTC has a history of scrutinizing Polymarket, having previously investigated the platform and fined it $1.4 million in 2022 for operating without a license in the U.S. The senators' letter specifically asks the CFTC to determine if betting on wildfires is in the public interest and has given the agency until August 14 to respond to a series of questions. They are urging the CFTC to implement 'commonsense guardrails' to prevent individuals from profiting from wildfire threats to communities.