Overview
- A group of nine Democratic senators sent a formal letter to CFTC Chair Michael Selig this week asking the agency to prohibit or restrict prediction-market contracts that let people bet on wildfires and to answer specific questions by August 14.
- The senators say wildfire contracts could motivate people to start or prolong fires to profit, enable insider trading by people with privileged information, and turn community tragedies into tradable events.
- Reporting cited by lawmakers shows Polymarket accepted more than $1.2 million in bets tied to the January 2025 Palisades and Eaton fires, and earlier this year a U.S. service member was arrested after allegedly using classified intelligence to win about $400,000 on a prediction market.
- Prediction-market firms differ in their policies: Kalshi has banned wildfire contracts while Polymarket defends offering them as information tools, and courts and states have issued mixed rulings and bans that leave oversight fragmented.
- If the CFTC does not act or provide clear guidance, enforcement gaps could push risky markets offshore, raise public-safety threats for communities facing a severe fire season, and prompt further state and federal legal battles.