Senators Call For Crackdown on Prediction Markets Wildfires Bets

The rise of prediction markets has led to bets on just about anything. Six United States senators say that prediction markets’ wildfires bets being available represent a danger to society.

Six senators — Jeff Merkley (D-Ore.), Catherine Cortez Masto (D-Nev.), Jacky Rosen (D-Nev.), Jeanne Shaheen (D-N.H.), Adam Schiff (D-Calif.) and Alex Padilla (D-Calif.) — filed a joint letter to Michael Selig, head of the Commodity Futures Trading Commission. The letter states that the CFTC needs to rein in prediction markets’ wildfires bets, because the current setup can actually encourage arsonists to start fires and make money off a wildfire’s occurrence.

While betting on the weather is an accepted part of prediction markets’ offerings, that usually focuses on natural weather patterns. There’s very little that people can do to affect the weather, making those contracts a fair outcome with no risk to the environment or human lives.

Wildfires have been another matter. Given the arid climates and abundant forests of the western American states, it doesn’t take much for a forest fire to become uncontrollable. According to the senators’ letter, Polymarket took in $1.2 million on event contracts during the 2025 Palisades fires in California.

This summer, Merkley’s home state of Oregon has seen nearly 2 million acres of forest land burned. Nearly half of Oregon’s land is forested, making the state especially vulnerable to wildfires.

What Areas Have Prediction Markets’ Wildfires Bets Covered?

Available contracts have covered a wide range of outcomes. One potential outcome has been which neighborhoods the flames would spread to next. That’s an area of particular concern for the senators, because it’s easy to manipulate. Hypothetically, an arsonist could place a wager, then go to that neighborhood and start a fire..

“By offering contracts on fires, prediction market sites run the risk of encouraging people to influence fires that have already started, creating additional concerns around public safety and insider trading,” the letter stated.

What Questions Does the Letter Ask?

The senators have requested answers from Selig on prediction markets’ wildfires bets by Aug. 14. Specifically, they’ve laid out four questions they want answered:

Their main question concerns whether the CFTC is considering prohibiting prediction markets’ wildfires bets moving forward. If not, they’d like to know if the CFTC plans to curb these bets, what guidance they have while making these decisions and whether they believe these contracts are in the public’s interest.

Based on recent events, the senators’ concerns appear real. On Aug. 3, officers in Spokane County, Wash., arrested a suspect in conjunction with the Old Trails fire in Spokane. Although there’s no confirmed link between the suspect’s actions and prediction markets’ wildfires bets, the possibility of both insider trading and risk to human lives was enough to raise the alarm of the Senate.