US Senators Urge CFTC to Ban Wildfire Prediction Markets

A group of nine Democratic senators, including Jeff Merkley, Alex Padilla, Adam Schiff and Catherine Cortez Masto, sent a letter to Commodity Futures Trading Commission Chair Michael Selig demanding that the agency prohibit prediction‑market platforms from offering contracts tied to destructive wildfires. The lawmakers argue that such markets commodify human suffering, create incentives for arson and insider trading, and could influence the course of active fires.

The letter cites Polymarket’s acceptance of more than $1.2 million in wagers on the January 2025 Eaton and Palisades fires in the Los Angeles area, and notes that rival platform Kalshi also hosts similar contracts. Senators gave the CFTC until August 14 to explain its stance on whether wildfire event contracts serve the public interest. Polymarket defended its service as a source of real‑time information, while the New York Attorney General has sued Kalshi for operating an illegal gambling operation. The controversy highlights growing regulatory scrutiny of prediction markets that allow betting on natural‑disaster outcomes.