Senators demand crackdown on wildfire “prediction markets”
A group of US senators has written to the Commodity Futures Trading Commission (CFTC) demanding action against prediction markets that let people bet on wildfires, arguing such contracts profit off human suffering and could incentivise arson. The letter, sent by lawmakers from Oregon, California, Nevada, Minnesota and New Hampshire, comes as wildfires actively burn across the Pacific Northwest, lending the demand added urgency and prompting sharp criticism from firefighting and fire-research experts.
The senators' letter cites Polymarket's hosting of bets on the January 2025 Los Angeles wildfires and another site offering "simulated bets" on California fires, warning of risks including arson and insider trading. It follows the arrest of an arson suspect linked to a blaze threatening Spokane, Washington, where hundreds of buildings have been destroyed and roughly a quarter of residents evacuated. Rival platform Kalshi said it bans wildfire markets over "perverse incentives," while Polymarket defended betting as a source of accurate information and claimed it currently has no active wildfire markets. Wildfire experts, including a UC Berkeley fire researcher and the head of Grassroots Wildland Firefighters, condemned the markets as disturbing given the human cost involved.
- Senators urge CFTC to crack down on wildfire betting markets
- Letter warns such bets could encourage arson, insider trading
- Comes amid active, destructive wildfires in Spokone, Washington area
Both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
The strongest case for prediction markets rests on their proven value as forecasting tools that aggregate dispersed information. The mechanics of the arson concern is questionable: betting on an event doesn't create incentives to cause it, and we permit speculation on countless human tragedies without assuming bets cause them. Restricting markets based on emotional discomfort represents paternalism that undermines both free markets and informational freedom.
The case against
There's a legitimate ethical concern that commodifying human tragedies with such severe consequences crosses a defensible line, even if prediction markets are accurate forecasting tools. The real risk is that financial incentives could subtly influence behaviour, particularly for those with inside information about wildfire risk or spread patterns. The fact that other platforms have voluntarily withdrawn such markets suggests recognition that some forms of speculation, however information-efficient, exceed reasonable ethical bounds.