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Nine Democratic senators are urging the Commodity Futures Trading Commission to crack down on wildfire prediction markets, arguing the contracts could create dangerous incentives and undermine public trust during disasters.
The push has a clear California connection. In their letter to CFTC Chair Michael Selig, the senators pointed to public reports that Polymarket accepted more than $1.2 million in bets tied to the Palisades and Eaton fires in January 2025. According to the letter, those fires killed 31 people and destroyed more than 16,000 structures in the Los Angeles area.
Senators cite arson risk and disaster profiteering
The senators said wildfire event contracts raise concerns beyond ordinary speculative trading. In the letter, they wrote that offering bets on destructive wildfires threatens to minimize communities’ suffering “all so the rich and powerful can profit.”
They also warned of “the heightened risk” that people could be tempted to commit arson or try to influence fires that have already started in order to benefit from a wager.
The lawmakers asked the CFTC to explain how it plans to crack down on the practice and what guardrails it may impose to prevent people from profiting from wildfire disasters. They also asked whether event contracts tied to wildfire duration, destruction, or growth would be considered in the public interest.
The senators signing the letter include Oregon’s Jeff Merkley and Ron Wyden, along with Alex Padilla, Adam Schiff, Jacky Rosen, Catherine Cortez Masto, Martin Heinrich, Amy Klobuchar, and Jeanne Shaheen.
What the CFTC is being asked to decide
The letter says wildfire contracts may currently be offered by offshore markets and could later be listed by U.S.-based Designated Contract Markets. The senators asked whether the CFTC is considering prohibiting those U.S. platforms from offering wildfire event contracts and whether it has plans to curb the bets in both domestic and offshore markets.
For California readers who follow prediction-market regulation, the immediate takeaway is that federal scrutiny of disaster-related event contracts is increasing, especially when markets are linked to deadly in-state events.
The CFTC was asked to respond by Aug. 14, 2026. The source report does not say whether the agency has already taken enforcement action or how it plans to answer the senators’ questions.
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Source: As reported by centraloregondaily.com.
