Lawmakers are urging the Commodity Futures Trading Commission (CFTC) to put a stop to prediction markets that would allow trading on wildfires. However, no such markets have been operational since January 2025. In fact, the only markets that did exist were on Polymarket's international platform, which operates outside CFTC jurisdiction. The U.S. version of Polymarket was launched only late last year.
A representative from Polymarket confirmed via email that no wildfire markets have been available since January 2025.
In a recent letter directed to CFTC Chairman Michael Selig, nine lawmakers expressed their concern. They stated, "Offering bets on destructive wildfires threatens to minimize communities' suffering all so the rich and powerful can profit." The letter also noted the risk that individuals may be inclined to commit arson to ensure their bets succeed, according to local fire officials.
Senator Jeff Merkley shared his astonishment regarding the existence of betting on wildfires, stating, "When I heard that they were opening up betting on wildfires, I was astounded. You have the ability of human action to influence the outcome."
While the letter and media reports referenced previous trading opportunities about the Palisades and Los Angeles wildfires in January 2025, it appears that current reports are misleading. There were indeed three wildfire-related prediction markets at that time, which generated around $560,000 in combined volume. However, the last of these markets closed on January 31, 2025, and a search on Polymarket’s international site shows no present markets for ongoing wildfires in Los Angeles or Washington.
Dustin Gouker, writing in his newsletter The Event Horizon, pointed out that existing reports overlook a crucial fact: “No one is actually offering betting on wildfires.”
The opposition to wildfire prediction markets has similarities to an earlier backlash against those related to conflicts in Iran. Senator Adam Schiff, who endorsed the recent letter, introduced the DEATH BETS Act earlier this year. This proposed legislation aims to clarify the prohibition of markets related to death. The Commodity Exchange Act (CEA) already bars such markets.
Tarek Mansour, CEO of Kalshi, emphasized that all offerings comply with CEA regulations, asserting, “We don’t list markets directly tied to death. When there are markets where potential outcomes involve death, we design the rules to prevent people from profiting from death.” Furthermore, Kalshi has not proposed any wildfire-related markets and has stated it does not plan to.
While there are still war-related markets on Polymarket's international platform, those are unregulated by the CFTC. In matters of prediction markets, the CFTC maintains its position to support them. On Tuesday, the CFTC used its emergency authority to enable Kalshi to continue functioning normally. Selig remarked, "Congress did not intend for derivatives exchanges to be regulated under a patchwork of state gaming laws."
Former Senator Chris Dodd clarified that Congress didn’t mean to bypass state authority over gambling when it amended the CEA with the Dodd-Frank Act in 2010. The CFTC’s emergency action follows a $36 billion lawsuit from New York against Kalshi, aiming to halt its offering of sports markets. Selig declared, "New York has no business regulating these interstate financial markets."
While the CFTC navigates the challenges posed by state gambling regulators, addressing lawmakers about the absence of wildfire markets should be a less complicated issue.
