Democratic Senators Call for CFTC to Ban Wildfire Betting in Prediction Markets

Senators Call for Action Against Wildfire Betting

A coalition of nine Democratic senators has formally requested the Commodity Futures Trading Commission (CFTC) to implement a ban on betting related to wildfires within prediction markets. This initiative aims to address concerns that such markets could encourage activities like arson and insider trading, ultimately exploiting natural disasters.

In a letter directed to CFTC Chair Michael Selig, prominent figures including Senator Jeff Merkley (D-Ore.), Senator Alex Padilla (D-Calif.), and Senator Adam Schiff (D-Calif.) highlighted the dangers posed by contracts tied to wildfires. They articulated that betting on destructive events undermines community welfare and may tempt individuals to commit arson to secure profits from their wagers.

“Offering bets on destructive wildfires threatens to minimize communities’ suffering all so the rich and powerful can profit,” the senators stated.

The letter pointed out that platforms like Polymarket had already accepted over $1.2 million in bets related to wildfires in California in 2025, illustrating the growing trend of speculation on catastrophic occurrences. The senators warned that the existence of such markets could invite individuals to manipulate ongoing fires, amplifying risks to public safety.

Prediction markets allow users to trade contracts based on the likelihood of future events, with recent growth seen in platforms such as Myriad, launched by Dastan. The senators emphasized the urgency of the CFTC to act before the upcoming wildfire season, noting the potential for U.S.-based markets to follow in the footsteps of offshore sites like Polymarket.

This appeal occurs amidst heightened scrutiny of prediction markets, with lawmakers and regulators increasingly focused on the sector. Earlier this year, investment bank Bernstein projected annual trading volumes in prediction markets could reach $1 trillion by 2030, driven by institutional investor interest. Additionally, Minnesota recently became the first state to ban prediction markets, leading to legal challenges from the CFTC and the Department of Justice over jurisdictional conflicts.

The regulatory landscape remains uncertain, with Kentucky suing Kalshi and Polymarket for alleged illegal sports betting operations, and a federal judge in Michigan ruling that sports prediction markets do not fall under CFTC oversight, further complicating the regulatory framework for these platforms.