Oregon Senators Ask CFTC to Ban Wildfire Betting — Citing Arson Risk and the $1.2 Million Wagered on the LA Fires

A public coalition that includes Oregon's senators has sent a formal letter to CFTC Chair Michael Selig demanding that the commission prohibit designated contract markets from offering event contracts on active wildfires. The demand was triggered by CNN reporting that Polymarket, the world's largest prediction market platform by volume, accepted more than $1.2 million in wagers on the Palisades and Eaton fires — the January 2025 Los Angeles wildfires that killed 31 people and destroyed more than 16,000 structures. '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. 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.' The CFTC has been asked to respond to four specific questions by August 14.

The letter also targets a newly launched platform — not Kalshi or Polymarket — that allows users to place simulated bets on California wildfires under the slogan 'You can't predict fire, but you can trade on it.' The emergence of disaster-specific platforms signals that the CFTC's decision on wildfire contracts will set a precedent not just for the established licensed exchanges but for an expanding fringe of operators explicitly building products around catastrophic events. The senators are asking the commission to address both domestic designated contract markets and offshore platforms, which fall outside CFTC direct jurisdiction but remain accessible to US users.

The arson argument is the most structurally distinctive objection in a summer of prediction market integrity debates. Clinical trial researchers have warned that pharmacists and coordinators with trial access could tamper with results for a payout — a concern that requires specific medical access and expertise. Wildfire arson requires no specialized knowledge. A person with a bet on a wildfire burning more than a specified number of acres faces a much lower barrier to influencing their position than any financial market participant. Fire officials have raised this specific concern rather than legislators alone — the warning about influencing containment of ongoing fires adds a second mechanism: a bettor positioned on a fire growing could obstruct suppression efforts, report false conditions, or interfere with evacuation coordination in areas where they have access. Whether any of these risks materialize in practice is unknown, but the CFTC's four-question deadline suggests the senators are pressing for a regulatory commitment before the 2026 fire season produces the conditions in which the risk would become concrete.

The timing intersects with the CFTC's broader rulemaking process at a critical moment. The commission's proposed NPRM, published in the Federal Register on June 12 and covering 267 pages, would permit most sports event contracts while banning specific categories including single-play, injury, officiating, and pre-collegiate markets. The proposed rule did not address wildfire or natural disaster contracts explicitly — a gap the senators' letter is now pressing the commission to fill. The CFTC comment window closed July 27. The August 14 deadline for the commission's response on wildfire betting arrives as the commission is processing thousands of comments on the NPRM and navigating eleven simultaneous state-level litigation cases. It is the second high-profile ethical challenge to land on the commission's desk in as many weeks — the clinical trial betting controversy reported by NPR on August 7 is the other — and both arrive at a moment when the commission is under active congressional scrutiny following the House Agriculture Committee hearing on July 22. Chair Selig has called the state enforcement actions an 'onslaught' and a 'power grab,' but the wildfire and clinical trial controversies represent a different kind of pressure: not from states asserting jurisdiction, but from the public questioning whether certain prediction market categories should exist at all.

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