US Senators Call for Curbs on Wildfire Prediction Markets Over Arson Risk

^{Wildfires in California / © Shutterstock.com}

A group of Democratic senators has urged the US Commodity Futures Trading Commission (CFTC) to take action against prediction markets tied to wildfires. The lawmakers fear that allowing people to profit from such events could encourage arson, Bloomberg reported.

They cited contracts offered by the international prediction platform Polymarket linked to major wildfires in California in early 2025. Trading volume on those markets exceeded $1.2 million.

A service called Wyldfyre has also emerged, focusing specifically on wildfire prediction markets. For now, users trade only with virtual currency, with no deposits or cash payouts. The website does not disclose who created or operates the platform.

Wildfire prediction markets already exist outside the regulated US market. The senators want to know how the CFTC plans to respond to the spread of such contracts both domestically and on overseas platforms.

Polymarket acknowledged the risks associated with these markets but argued that banning them would not prevent tragedies. According to the company, a ban would merely restrict access to information about how events may unfold, as reflected in traders’ forecasts.

Meanwhile, US-regulated platforms Kalshi and Polymarket US do not offer wildfire-related contracts. Kalshi said it had decided against listing such markets because they could create dangerous incentives.

Kalshi and Polymarket US nevertheless allow trading on contracts linked to earthquakes, hurricanes and certain other natural disasters.

The CFTC is currently considering proposals to tighten oversight of prediction market platforms. Among other measures, the regulator is weighing whether to prohibit markets that could be deemed contrary to the public interest.

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