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2w ago

Senators Demand CFTC Curb Wildfire Betting After $1.2M Was Wagered

Lawmakers say wildfire prediction markets create perverse incentives that could encourage arson or insider exploitation.

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Sens. Alex Padilla and Adam Schiff are among the elected officials pushing back against prediction market platforms after more than $1 million was wagered on the devastating, deadly 2025 earthquakes, whose impacts continue to reverberate.

Overview

  • In early August nine U.S. senators led by Alex Padilla and Adam Schiff sent a letter to the Commodity Futures Trading Commission that gives the agency until Aug. 14 to say whether it will ban or restrict wildfire event contracts.
  • Reporting cited by the senators found more than $1.2 million was wagered on Polymarket contracts tied to the January 2025 Palisades and Eaton fires, including bets on containment dates and acres burned.
  • Polymarket defended offering those markets as a source of timely information, a new entrant called Wyldfyre has launched a realtime wildfire market, and some U.S.-regulated venues such as Kalshi have avoided listing wildfire contracts.
  • Lawmakers and ethicists warn that bets tied to active disasters create unsafe financial incentives and insider risks, and they are urging the CFTC to lay out enforcement plans and common-sense guardrails.
  • Regulatory authority is unsettled and experts say any U.S. restriction could push activity offshore, which would complicate enforcement and affect how communities and emergency crews encounter and use wildfire-related information.