Nine senators ask federal regulator whether it will ban betting on wildfires

Nine Senate Democrats wrote to the Commodity Futures Trading Commission on August 3 asking whether the agency will prohibit the exchanges it registers from listing contracts that let people bet on wildfires. The letter to Chairman Michael Selig was led by Sen. Jeff Merkley of Oregon and signed by Alex Padilla and Adam Schiff of California, Jeanne Shaheen of New Hampshire, Jacky Rosen and Catherine Cortez Masto of Nevada, Martin Heinrich of New Mexico, Ron Wyden of Oregon, and Amy Klobuchar of Minnesota.

“Offering bets on destructive wildfires threatens to minimize communities’ suffering all so the rich and powerful can profit,” the senators wrote. They asked for answers by August 14 to four questions: whether the commission is considering barring designated contract markets from listing wildfire event contracts as part of the rulemaking now underway; whether it has plans to curb such bets on domestic and offshore platforms; whether it considers contracts on how long a fire will last, how much it will destroy and how much it will grow to be in the public interest; and whether it has issued guidance or planned enforcement on them.

What the senators are pointing at

The letter cites reporting by Oregon Public Broadcasting that Polymarket, which the senators describe as the largest prediction market platform in the world, accepted more than $1.2 million in bets surrounding the Palisades and Eaton fires in January 2025. High Country News reported that the platform hosted nearly 20 markets on those fires, with contracts on acreage burned, geographic spread, containment timelines and overall destruction.

The two fires began hours apart on January 7, 2025. They killed 31 people and destroyed 16,246 structures in Los Angeles County. The letter opens by noting that the United States faces another record-breaking fire season this year. Oregon, which Merkley represents, has burned more than 1.7 million acres as of late July, according to Claims Journal.

The letter also points to Futurism’s report on Wyldfyre, a California-focused platform that launched ahead of the 2026 fire season and whose slogan reads, “You can’t predict fire, but you can trade on it.” High Country News reported that Wyldfyre prices county and city wildfire risk in real time using NASA hotspot data, and that real-money betting was listed as coming soon at the time of publication.

The arson question

The senators wrote that state and local fire officials have raised the risk that individuals could be tempted to commit arson to make their bets pay off, and that contracts on fires already burning create concerns around public safety and insider trading.

The US Forest Service told High Country News that systems tying financial gain to wildfire outcomes risk encouraging misuse, including arson, and said such systems are incompatible with its mission. Ann Skeet, senior director of leadership ethics at Santa Clara University’s Markkula Center for Applied Ethics, told the outlet that a market that might support that kind of activity is a dangerous one, and noted that firefighters or land managers with advance knowledge could face an incentive to trade on it. Both the Forest Service and CAL FIRE said they do not use prediction market data, relying instead on validated science and physics-based modeling.

Crypto Briefing reported that no confirmed incidents of arson have been linked to prediction market activity.

Where the contracts are offered

The senators noted in the letter that the wildfire bets appear to be offered only on the offshore Polymarket site, and wrote that it is a matter of time before US-based designated contract markets try to offer them.

Kalshi and Polymarket US, both of which the CFTC regulates, do not list wildfire contracts, Claims Journal reported. Kalshi said it prohibits such markets because they create perverse incentives. Polymarket said that while it recognizes the risks associated with these markets, removing them does not prevent a tragedy.

The rulemaking underway

The commission issued a notice of proposed rulemaking titled Prediction Markets; Public Interest Determinations on June 10, published in the Federal Register on June 12. The proposal sets out how the commission would decide whether an event contract listed by a registered exchange is contrary to the public interest, and applies a multifactor test to five categories named in the law: gaming, unlawful conduct, terrorism, assassination and war. The 45-day comment period closed on July 27.

Law firm analyses of the proposal, including one by Holland & Knight, describe it as a response to the growth of prediction markets, which exceeded $25 billion in total trading volume across CFTC-registered platforms in 2025. Wildfires are not among the five categories the proposal addresses.

The senators asked the commission to respond by August 14.