A group of lawmakers are pressing federal regulators to crack down on prediction markets that allow people to wager on wildfires, warning the betting could create incentives for arsonists or encourage people to influence active fires.
California Sens. Adam Schiff and Alex Padilla joined seven other Democratic senators in an Aug. 3 letter urging Commodity Futures Trading Commission Chair Michael Selig to consider restricting wildfire-related online betting and explain what steps the agency plans to take against such markets.
"Offering bets on destructive wildfires threatens to minimize communities' suffering all so the rich and powerful can profit," the senators wrote.
They also warned that allowing people to wager on how long a wildfire will burn, how far it will spread, or how much destruction it will cause could encourage someone to interfere with a fire or even deliberately start one.
"There's also the heightened risk — according to state and local fire officials — that individuals could be tempted to commit arson in order to make sure their bets are successful," the senators wrote.
The lawmakers pointed to wagering surrounding the Palisades and Eaton fires, which devastated Los Angeles County in January 2025. More than $1.2 million was wagered on the fires through Polymarket, according to the senators.
The Palisades and Eaton fires killed 31 people and destroyed more than 16,000 structures.
During the fires, Polymarket users could trade on questions including when the blazes would be contained, whether flames would reach particular areas, and how many acres would burn, the Washington Post reported.
A Polymarket spokesperson told the Post that its wildfire markets are not available to U.S. consumers, though its international platform allows such trades.
In a statement to KTLA, the company defended prediction markets as a source of information during major events.
"While we are not blind to the risks, removing these markets does not prevent a tragedy but makes the most accurate information less accessible to the people who need it most," a Polymarket spokesperson said.
Kalshi, another major prediction-market operator, has not offered wildfire markets because doing so "creates perverse incentives," a company spokesperson told the Guardian.
Those concerns are shared by some researchers.
Ann Skeet, senior director of leadership ethics at Santa Clara University's Markkula Center for Applied Ethics, told The Guardian that allowing people to bet on how fires spread could create motivation to start or manipulate a blaze.
Jamie L. Pietruska, a Rutgers University historian who studies weather prediction and gambling, told the Post that wildfires pose particular concerns because people can potentially influence their outcomes in ways they cannot with hurricanes or floods.
The senators asked the Commodity Futures Trading Commission whether it is considering banning wildfire event contracts from federally regulated markets and whether it plans to address similar contracts offered offshore.
They also asked the agency to weigh whether contracts based on how long a fire lasts, how much it destroys or how much it grows are in the public interest.
The lawmakers requested answers by Friday.
Schiff has separately pushed for broader restrictions on prediction markets. In March, he introduced legislation that would prohibit Commodity Futures Trading Commission-registered entities from offering contracts tied to terrorism, assassination, war or an individual's death. He has also backed legislation targeting sports-style prediction markets and the use of government insider information to place bets.
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