(KMJ) A group of US Senators led by those from California are calling on online trading platforms to stop offering betting markets tied to wildfires, arguing the practice profits from disaster and could create harmful incentives to start wildfires.
The sites allow users to bet on where fires will burn next and other aspects of fires that do burn.
More than $1.2 million in bets were placed during the 2025 Palisades and Eaton wildfires in Los Angeles.
That was 10 times greater than the amount wagered on some baseball games recently. One betting site called Wyldfyre uses the slogan “You can’t predict fire but you can trade on it.” Polymarket also allows trading on wildfires.
CalFire firefighters are banned from betting on the sites.
A total of nine Democratic senators, led by Sen. Jeff Merkley (D-Ore.) alongside California Senators Alex Padilla and Adam Schiff, sent a formal letter to Commodity Futures Trading Commission (CFTC) Chair Michael Selig calling for a crackdown and ban on prediction markets offering wildfire-related contracts.
Key details behind the effort include:
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Perverse Incentives & Arson Risks: Lawmakers and fire officials warn that allowing people to wager on the spread, location, or containment timeline of fires creates a dangerous financial incentive for arson or deliberate interference with firefighting efforts.
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Significant Financial Volume: Platforms like Polymarket hosted nearly 20 prediction markets during the January 2025 Palisades and Eaton fires in Los Angeles County (which killed 31 people and destroyed over 16,000 structures), generating over $1.2 million in trades.
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Platforms Involved: While CFTC-regulated domestic exchanges like Kalshi explicitly ban wildfire contracts due to public safety concerns, offshore platforms like Polymarket host real-money wagers. California-focused start-up Wyldfyre uses NASA hotspot data to price risk under the slogan “You can’t predict fire, but you can trade on it”.
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Institutional Bans: Public safety agencies, including CAL FIRE and the U.S. Forest Service, strictly prohibit firefighters and personnel from participating in disaster prediction markets to avoid conflicts of interest and ethics violations.
