- Democratic senators from six states have sent a letter to CFTC chair Michael Selig urging action against betting on wildfires during a record-breaking wildfire season.
- The letter requests the CFTC to clarify by August 14 whether betting on wildfires is in the public interest and what enforcement actions it plans to take.
- Polymarket allowed bets on the Palisades and Eaton fires in early 2025, with over $1.2 million wagered.
- Experts and ethicists support the senators' call, warning that such betting could incentivize individuals to commit arson or prolong existing fires.
- The concern over wildfire betting arises during a record-breaking wildfire season in the US, with some platforms like Kalshi prohibiting such bets due to perverse incentives.
- Jamie L Pietruska noted that the senators' call to regulate prediction markets was year and a half late after the Polymarket bets on the Los Angeles fires.
- Police investigations into an incident in Paris raised concerns about the speed and scale of prediction markets in a climate-changed world.
US senators are raising alarms over betting on wildfires, urging the Commodity Futures Trading Commission (CFTC) to regulate prediction markets like Polymarket and Kalshi. In a letter, they highlighted the potential for such betting to incentivize arson during a record-breaking fire season.45678
The senators, including Jeff Merkley and Adam Schiff, expressed concerns that betting on outcomes such as acres burned could lead individuals to commit crimes to ensure their bets succeed. They stated, “As the United States faces yet another record-breaking fire season this year, the CFTC cannot allow these prediction markets to offer unrestricted betting on wildfires.”
The letter requested clarity from the CFTC by August 14 on whether such betting is in the public interest and what enforcement actions may be taken. This concern is heightened as platforms like Kalshi have already prohibited such bets due to the creation of “perverse incentives.”3
Experts, including Ann Skeet from Santa Clara University, echoed these concerns, stating, “Somebody could place a bet and then be motivated to actually start a fire.” Historian Jamie L Pietruska noted that the demand for regulation is “year and a half late” following significant betting on the Palisades and Eaton fires in Los Angeles, where wagers exceeded $1.2 million.9
The senators' actions reflect a growing recognition of the ethical implications and public safety risks associated with betting on natural disasters, particularly in a climate-changed world.
“The letter gives the CFTC until August 14 to respond, and experts note that over $1.2 million was wagered on the Los Angeles fires. Ann Skeet of Santa Clara University warns that betting on wildfire spread could motivate people to start fires.”
The Independent
The Guardian
