Several US senators have written to the Commodity Futures Trading Commission (CFTC) asking what steps it plans to take regarding “prediction markets” that allow people to bet on wildfire outcomes, according to a report citing a letter reviewed by Ars Technica. The senators, who represent Oregon, California, Nevada, Minnesota, and New Hampshire, point to concerns that trading contracts tied to destructive fires could reduce incentives to prioritize community safety and instead enable profit. The letter highlights specific examples, including that Polymarket hosted bets in January 2025 involving wildfires in Los Angeles, and it also references another platform that offers “simulated bets” focused on California wildfires.
The senators’ letter says wildfire market activity raises public-safety risks. It cites warnings from state and local fire officials that people could be tempted to commit arson to improve the odds of favorable results, and that markets might encourage interference with fires already underway. The letter also raises concerns related to insider trading.
In responses reported by Ars, Kalshi says it does not allow wildfire markets because it believes they create “perverse incentives.” Polymarket says it does not profit from outcomes and that it frames such offerings as information access, arguing that removing markets would reduce the availability of what it describes as accurate information.
