Senators Tell CFTC: Hot Takes on Wildfire Markets Are a Pyro Predict-ament 🔥

Nine Democratic senators are pressing the Commodity Futures Trading Commission to prohibit event contracts tied to wildfires, warning that prediction markets offering such bets create incentives for arson, insider trading, and the commodification of natural disasters. In a letter sent earlier this week to CFTC Chair Michael Selig, Sen. Jeff Merkley (D-Ore.), Sen. Alex Padilla (D-Calif.), Sen. Adam Schiff (D-Calif.), and six other Democratic senators asked the agency to ban wildfire-related event contracts before the start of next year's wildfire season.

"Offering bets on destructive wildfires threatens to minimize communities' suffering all so the rich and powerful can profit," the senators wrote. "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 lawmakers cited reports that Polymarket accepted more than $1.2 million in bets tied to California's Palisades and Eaton fires in 2025, and flagged newer platforms that have expanded wildfire-related markets. "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," they wrote.

The senators argued the CFTC should act on wildfire contracts even where they are offered offshore, saying it is "only a matter of time before other U.S. based Designated Contract Markets (DCMs) try to offer these." Prediction markets, which let users buy and sell contracts tied to the outcome of future events, have rapidly grown in scope, covering everything from crypto market movements to geopolitical developments. Myriad, launched by Decrypt's parent company Dastan, is among the platforms enabling users to wager on such outcomes. "The CFTC must lead the charge to rein in these contracts in the U.S. and offshore and put in place common-sense guardrails to prevent people from profiting as wildfires threaten communities," the letter added.

The request is the latest flashpoint in a broader fight over how prediction markets should be regulated. In April, investment bank Bernstein projected that annual trading volume across the sector could reach $1 trillion by 2030 as more institutional investors enter the market. That same month, President Donald Trump softened his earlier criticism of prediction markets, having previously described them as having "turned the world into a casino." In May, Minnesota became the first state to ban prediction markets before the CFTC and Department of Justice sued the state, arguing the law conflicted with federal authority. In June, Kentucky sued Kalshi and Polymarket over claims they were operating illegal sports betting platforms.