WASHINGTON, D.C. — Several US senators wrote a letter to the Commodity Futures Trading Commission inquiring about the agency’s plans to regulate prediction markets that offer contracts for individuals to bet on wildfires. The public letter was issued on a Monday.

The senators who signed the letter represent Oregon, California, Nevada, Minnesota, and New Hampshire. Their correspondence seeks clarity on regulatory oversight for platforms that allow wagering on natural disaster outcomes.

The lawmakers expressed deep concern regarding the ethical and safety implications of such financial instruments. "Offering bets on destructive wildfires threatens to minimize communities’ suffering, all so the rich and powerful can profit," the senators wrote in the letter.

Beyond the moral objections, the letter outlines specific dangers to public safety. "There’s also the heightened risk—according to state and local fire officials—that individuals could be tempted to commit arson in order to make sure their bets are successful," the letter states.

The senators further warned that these markets could interfere with emergency response efforts. "By offering contracts on fires, prediction market sites run the risk of encouraging people to influence fires that have already started, creating additional concerns around public safety and insider trading," the letter states.

The letter cites that Polymarket hosted bets in January 2025 on the wildfires in Los Angeles. Polymarket is an online prediction solicitation and aggregation engine that was established in 2020.

A CFTC order found that beginning in approximately June 2020, Polymarket operated an illegal unregistered facility for event-based binary options, offering more than 900 separate event markets including bets on economic indicators and political outcomes. A Polymarket spokesperson stated on background that Polymarket does not currently have any markets on wildfires and has not for some time.

The letter mentions another website that accepts simulated bets exclusively on California wildfires. This indicates that multiple platforms may be involved in offering wildfire-related contracts.

Kalshi is a major prediction market that has taken a different approach to this issue. "[Kalshi] does not allow such wildfire markets because they create perverse incentives," said Elisabeth Diana, a Kalshi spokesperson.

Michael Gollner, a professor at the UC Berkeley Fire Research Lab, supported the senators' concerns regarding safety. "[Such markets] could create a perverse incentive for arson or other destructive activities," said Michael Gollner, a professor at the UC Berkeley Fire Research Lab.

Gollner argued that financial focus should shift away from disaster monetization. "We should not focus our energy on monetizing the outcome of devastating natural disasters," said Michael Gollner, a professor at the UC Berkeley Fire Research Lab.

He suggested that resources would be better spent on prevention. "Instead, we should focus our efforts on mitigating these events with targeting investments before they start so that our communities can become more resilient," said Michael Gollner, a professor at the UC Berkeley Fire Research Lab.

Riva Duncan is the president of Grassroots Wildland Firefighters, a nonprofit organization made up of current and former federal wildland firefighters. She voiced strong opposition to the practice of betting on fires.

"To think there are people hoping to make money off tragedy is beyond comprehension," said Riva Duncan, president of Grassroots Wildland Firefighters. She emphasized the human cost of such speculation.

"They should ask some of the folks in Spokane who just lost their homes how they feel about it," said Riva Duncan, president of Grassroots Wildland Firefighters. Active wildfires continue to burn in significant parts of the Pacific Northwest.

Several hundred buildings have been destroyed by the wildfires in Spokane. Approximately one quarter of Spokane’s population has recently been ordered to evacuate.

A Polymarket spokesperson defended the utility of prediction markets in an email. "People 'come to Polymarket for information,'" a Polymarket spokesperson stated in an email.

The spokesperson argued that the company does not benefit from the disasters themselves. "[Polymarket] does not 'profit from outcomes,'" a Polymarket spokesperson stated in an email.

"While we are not blind to the risks, removing these markets does not prevent a tragedy but makes the most accurate information less accessible to the people who need it most," a Polymarket spokesperson wrote in an email.

The senators' inquiry shows growing scrutiny of prediction markets as they expand into new categories of events. Earlier coverage on 2026-07-28 reported: 44 states are aligned on one thing in their fight against prediction markets. It's about sports wagering. This broader regulatory attention suggests that wildfire betting may face similar legal challenges.

The debate occurs against a backdrop of severe wildfire activity in the western United States. Earlier coverage on 2026-07-23 reported: Wyden, Merkley Demand Enhanced Wildfire Prevention and Response Assistance from Trump Administration. The intersection of financial speculation and active disaster zones raises unresolved questions about market integrity and public safety protections.

Why It Matters

The senators' inquiry seeks to establish regulatory precedents that could ban financial instruments creating perverse incentives for arson or interference with active emergency responses. With hundreds of buildings destroyed in Spokane and evacuations ongoing, the debate centers on whether prediction markets exacerbate public safety risks during natural disasters. The outcome will determine if platforms can host contracts tied to destructive events where profit motives might conflict with community resilience and life-saving efforts.