Arson for Profit? Dems Push to Stamp Out Wildfire Betting

Nine Democratic Senators have written to the federal Commodity Futures Trading Commission, which regulates prediction markets, expressing concern that event contracts tied to wildfires could financially incentivize arson.

The group is led by Sen. Jeff Merkley (D-Ore.), as Oregon and other parts of the Pacific Northwest continue to grapple with weeks of wildfires.

$1.2M Traded on L.A. Fires

The letter, dated Monday, August 3, is addressed to CFTC chair Michael Selig. It notes that Polymarket accepted more than $1.2 million in trades on contracts related to the Palisades and Eaton fires in January 2025, which devastated the Los Angeles area, causing the deaths of 31 people.

The senators also pointed to Wyldfyre, a California wildfire-focused prediction platform that currently uses simulated rather than real-money trading and advertises itself with the slogan: “You can’t predict fire, but you can trade on it.”

Such markets “risk creating perverse incentives, undermining public trust and commodifying human suffering in ways that warrant careful scrutiny,” the senators wrote.

Currently, no CFTC-regulated prediction market offers wildfire event contracts. This includes the regulated US arm of Polymarket. However, that isn’t the case for the offshore version of Polymarket, the platform’s main crypto marketplace.

Senators Press for Answers

Nevertheless, the senators pressed the agency on whether it is considering prohibiting wildfire-related event contracts as part of its ongoing rulemaking, arguing such markets may be contrary to the public interest.

They also asked what steps, if any, the agency plans to take regarding wildfire-related contracts offered in the United States, and how it intends to address similar markets operating offshore.

Finally, they asked whether the commission has issued, or plans to issue, guidance or enforcement measures addressing such markets.

Polymarket Doubles Down

When approached by Bloomberg for comment, Polymarket defended wildfire contracts, framing them as a source of market-based forecasting information.

“When tragedy unfolds, people turn to the news for commentary and to Polymarket for information,” the company said in an emailed statement. “While we recognize the risks associated with these markets, removing them does not prevent a tragedy. It only makes timely, market-based information less accessible to those seeking to understand what may happen next.”