Several US senators have written to the Commodity Futures Trading Commission (CFTC) asking about the agency’s plans to “combat prediction markets” that offer “contracts for betting on wildfires.” These “prediction markets” are platforms where participants bet on future events, including natural disasters.
A group of senators representing Oregon, California, Nevada, Minnesota, and New Hampshire wrote: “Offering bets on destructive wildfires threatens to diminish the suffering of communities, solely for the profit of the wealthy and influential.” The document specifically mentions that Polymarket accepted bets on wildfires in Los Angeles in January 2025, as well as another website that accepts “simulated bets” exclusively on fires in California.
Risks of arson and insider trading
“There is also an increased risk — according to state and local fire services — that people may be tempted to commit arson to ensure the success of their bets,” the letter states. “By offering fire contracts, prediction market sites risk encouraging people to influence already started fires, creating additional concerns about public safety and insider trading.”
This public letter, released on Monday, comes amid active wildfires continuing to rage in significant parts of the Pacific Northwest. On Tuesday, the Spokane County Sheriff’s Office announced the arrest of an arson suspect who is believed to have caused one of the fires currently threatening Spokane, Washington, and surrounding areas. Several hundred buildings have already been destroyed, and about a quarter of the city’s population was recently ordered to evacuate.
Different approaches and expert outrage
The CFTC did not immediately respond to a request for comment from Ars. Kalshi, one of the main prediction markets, does not allow such wildfire betting markets “because of the perverse incentives they create,” spokesperson Elizabeth Diana said in an email. However, its main competitor, Polymarket, has taken a different approach.
A Polymarket representative, in a statement emailed to Ars, noted that the company does not “benefit from how events conclude,” adding that people “come to Polymarket for information.” “While we do not dispute the risks, removing these markets does not prevent tragedy but makes the most accurate information less accessible to those who need it most,” he wrote. In the same email, the representative also noted “on a confidential basis” (which Ars did not agree to) that “Polymarket currently has no wildfire betting markets and has not had them for some time.” The representative declined to answer additional questions about whether Polymarket claims to provide “the most accurate information” by definition to people experiencing a wildfire.
Wildfire experts, for their part, say they are shocked by the very existence of prediction markets that allow betting on such disasters. “[Such markets] can create perverse incentives for arson or other destructive activities,” Michael Gollner, a professor at the University of California, Berkeley Fire Research Laboratory, wrote in an email to Ars. “We should not focus our energy on monetizing the outcomes of destructive natural disasters. Instead, we should focus our efforts on mitigating these events through targeted investments before they occur, so our communities can become more resilient.”
Riva Duncan, president of Grassroots Wildland Firefighters — a nonprofit organization consisting of current and former federal wildland firefighters — said her community is “deeply outraged” by these betting markets. “The thought that there are people hoping to profit from tragedy is incomprehensible,” she wrote to Ars. “They should ask some people in Spokane who have just lost their homes what they think about it.”
Source: ArsTechnica
