California’s senators are pressing a federal agency on its plans to crack down on a practice they say could tempt people to commit arson and “influence” fires already burning. It comes right as multiple wildfires scorch thousands of acres across swaths of the state as of Tuesday, Aug. 11, including the Timber Fire in Big Sur.
The Commodity Futures Trading Commission is facing several questions from California Senators Alex Padilla and Adam Schiff — and senators of several other states — about bets being made on prediction markets about wildfires.
Prediction markets specialize in offering event contracts, according to the Congressional Research Service. “Event contracts allow traders to bet on specific outcomes, offering opportunities to profit
from predictions on everything from sports and entertainment to politics and the economy,” according to Reuters.
Well-known prediction markets include Kalshi and Polymarket. Senators pointed to the latter in their letter to the federal agency, noting its activity regarding the devastating wildfires in Los Angeles County in January 2025.
“When will the Palisades wildfire be 50% contained?” was just one prediction market on Polymarket that users could take a position on, selecting between several dates in January. Another: “Palisades wildfire burns 10,000 acres by Friday?”
In March, Aeon published an essay that said Polymarket bets on the Los Angeles wildfires in 2025 added up to over $1.2 million, a figure senators highlighted in their letter.
The senators said that while these bets appear to be offered only on the offshore Polymarket site, “it is only a matter of time before other U.S. based Designated Contract Markets try to offer these.” Designated contract markets operate under the oversight of the Commodity Futures Trading Commission.
What do senators want?
The federal agency “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 senators said.
They want to know whether the Commodity Futures Trading Commission has plans to curb bets on wildfires on prediction markets in the United States, and whether it’ll ban the designated contract markets from offering event contracts on wildfires. Senators also asked the federal agency whether it will address these contracts being offered on offshore markets, and whether it has any guidance or planned enforcement related to these wildfire contracts.
“Offering bets on destructive wildfires threatens to minimize communities’ suffering all so the rich and powerful can profit,” according to the senators’ letter.
Senators requested that the Commodity Futures Trading Commission provide answers by Aug. 14.
Paris Barraza is a reporter covering Los Angeles and Southern California for the USA TODAY Network. Reach her at pbarraza@usatodayco.com.
This article originally appeared on USA TODAY: California senators want to curb placing bets on wildfires
