Senators Urge CFTC to Ban Wildfire Prediction Market Bets

Democratic Senators Urge Crackdown on Wildfire Prediction Markets

Nine Democratic senators are calling on the Commodity Futures Trading Commission (CFTC) to take decisive action against prediction markets that allow users to wager on wildfires. The lawmakers argue that such contracts create dangerous incentives to profit from natural disasters.

In a letter sent earlier this week to CFTC Chair Michael Selig, Senator Jeff Merkley (D-Ore.), Senator Alex Padilla (D-Calif.), Senator Adam Schiff (D-Calif.), and six other Democratic senators urged the agency to ban wildfire-related event contracts. They warned that these markets could encourage arson, facilitate insider trading, and jeopardize public safety.

“Offering bets on destructive wildfires threatens to minimize communities’ suffering all so the rich and powerful can profit,” the senators wrote. “There’s also the heightened risk—according to state and local fire officials—that individuals could be tempted to commit arson in order to make sure their bets are successful.”

The senators highlighted reports indicating that Polymarket accepted over $1.2 million in bets linked to California’s Palisades and Eaton fires in 2025. They also pointed to newer platforms enabling users to bet on wildfires, asserting that these markets incentivize speculation on destructive events.

“By offering contracts on fires, prediction market sites run the risk of encouraging people to influence fires that have already started, creating additional concerns around public safety and insider trading,” the letter stated.

Prediction markets allow users to buy and sell contracts, essentially betting on the likelihood of future events occurring. Platforms such as Myriad, launched by Decrypt’s parent company Dastan, have seen rapid growth in recent years, enabling users to predict outcomes ranging from cryptocurrency market movements to geopolitical events.

The senators are pressing for the CFTC to curb wildfire betting before the commencement of next year’s wildfire season.

“While these bets appear to be offered only on the offshore Polymarket site, it is only a matter of time before other U.S. based Designated Contract Markets (DCMs) try to offer these,” the letter read. “The CFTC must lead the charge to rein in these contracts in the U.S. and offshore and put in place common-sense guardrails to prevent people from profiting as wildfires threaten communities.”

This appeal comes as prediction markets face increasing scrutiny from lawmakers and regulators. In April, investment bank Bernstein projected that annual trading volume in these markets could reach $1 trillion by 2030, driven by the entry of more institutional investors. In the same month, President Donald Trump moderated his criticism of prediction markets, having previously likened them to a “casino.”

The debate over the regulation of prediction markets has intensified in recent months. In May, Minnesota became the first state to ban prediction markets, a move that led to a lawsuit from the CFTC and the Department of Justice, who argued the state law conflicted with federal authority. In June, Kentucky sued Kalshi and Polymarket, alleging they operated illegal sports betting platforms. Further adding to the regulatory uncertainty, a federal judge in Michigan ruled that sports prediction markets are not under the purview of the CFTC, leaving the oversight of the industry in question.