Nine US senators have asked the Commodity Futures Trading Commission (CFTC) to restrict the trading of contracts that predict wildfires, arguing that traders could profit from fires lasting longer, spreading farther, or destroying more property. In a letter dated August 3, they requested a response from CFTC Chairman Michael Sellig by August 14.
Senator Jeff Merkley (D-Oregon) led the effort to send the letter, joined by Senators Alex Padilla (D-California), Jeanne Shaheen (D-New Hampshire), Adam Schiff (D-California), Jacky Rosen (D-Nevada), Catherine Cortez Masto (D-Nevada), Martin Heinrich (D-New Mexico), Ron Wyden (D-Oregon), and Amy Klobuchar (D-Minnesota)—the leading Democrat on the Senate Agriculture Committee, which oversees the CFTC. All signatories represent states affected by fires this season: in Oregon alone, approximately 1.7 million acres had burned by the end of July.
The senators asked whether the commission is considering prohibiting designated contract markets from offering wildfire-related contracts as part of its ongoing rulemaking efforts, "given that they are contrary to the public interest," and whether it has plans to restrict wildfire betting on prediction markets in the United States.
The lawmakers said they wrote the letter following public reports about these markets and that the Polymarket platform generated over $1.2 million in trading volume related to the "Palos Verdes" and "Eaton" fires that struck the Los Angeles area in January 2025. Trading volume on one specific market, dedicated to predicting the full containment date of the Palos Verdes fire, reached $711,587, while other contracts focused on the total acres burned and whether the flames would reach Beverly Hills.
"Offering bets on devastating wildfires risks trivializing the suffering of local communities so that wealthy and powerful individuals can profit," the senators wrote, adding that "there is also an increased risk—according to state and local fire officials—that individuals could be tempted to commit arson to guarantee the success of their bets."
At the time of writing, no confirmed case of arson has been linked to prediction market activity, and the letter does not claim any trader started a fire or hampered emergency response—but the logic mirrors that of an insider trading case in which federal authorities charged an Army sergeant with turning $33,000 into over $404,000 on Polymarket ahead of a raid on Maduro.
Polymarket rejected such accusations. "When a tragedy occurs, people turn to the news for commentary and to Polymarket for information," the company stated in a message to Bloomberg. "While we acknowledge the risks associated with these markets, eliminating them does not prevent tragedy. It only makes it harder for those seeking to understand what might happen next to access timely market information."
The Commodity Exchange Act allows the CFTC to ban contracts on events related to terrorism, murder, war, gambling, illegal activities, or other similar activities that the commission determines by rule to be contrary to the public interest. Wildfires are not explicitly mentioned in the law. Back in April, Merkley led an effort to send a letter asking the CFTC to ban contracts related to elections, war, military action, sports, and government decisions unless they serve economic hedging purposes. The commission did not go down that path: in its June proposal, it acknowledged that sports contracts involve gambling but proposed allowing virtually all of them through a 90-day case-by-case review process, rather than banning any category outright. Under this process, the regulator would evaluate each contract individually based on factors such as economic utility, hedging need, manipulation risk, participant protection, and the availability of reliable settlement information.
The senators acknowledged in their letter that the wildfire contracts they identified appear to have been offered exclusively through the international Polymarket platform, which notes on its market pages that it operates independently from the CFTC-regulated Polymarket US. Therefore, this request is partly preemptive—as they put it, "it is only a matter of time before other U.S.-based designated contract markets attempt to offer such contracts."
CFTC did not immediately respond to Bloomberg's request for comment.
