Prediction Market Bets on Wildfires Draw Scrutiny From Senators

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Or sign-in if you have an account.(Bloomberg) — A group of Democratic senators urged the Commodity Futures Trading Commission to rein in prediction market trading on wildfires, expressing concern that individuals could be tempted to commit arson to make their bets pay off. THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an Account“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,” Senator Jeff Merkley and others wrote in a letter to Chairman Michael Selig.The lawmakers asked whether the agency plans to curb prediction market wildfire bets on both domestic and offshore platforms. The letter pointed to offshore wagers on Polymarket that racked up more than $1.2 million in trades about the deadly Palisades and Eaton fires in California at the beginning of 2025.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againDevastating fires across Canada have blown smoke deep into dense US population centers in recent weeks and degraded air quality. Merkley’s home state has also faced multiple blazes, with about 1.7 million acres burned in Oregon through late July, according to the Statesman Journal of Salem.The CFTC and Polymarket didn’t immediately respond to a request for comment about the letter.Prediction markets have surged in popularity over the past 18 months and allow users to place bets on just about anything, from sports and award shows to geopolitical events. The CFTC is reviewing public input on a proposal that would place more guardrails around the platforms — which the agency views as derivatives exchanges — including whether certain contracts are against the public interest and should be prohibited.Another platform, Wyldfyre, has recently sprung up specifically for trading on California wildfires, touting: “You can’t predict fire, but you can trade on it.” That company doesn’t use real money to trade, emphasizing “play money only” on the current version of its website. In its terms of service, Wyldfyre says it is “not operated under, or subject to, financial-services or gambling regulations” because there is no purchase, deposit or payout of any kind. The website doesn’t provide information about who created or maintains the platform.Wyldfyre didn’t immediately respond to a request for comment.Prediction markets overseen by the CFTC like Kalshi and Polymarket US, the federally-regulated arm of the firm, don’t offer wildfire-specific contracts. Many firms including Kalshi, however, do allow trading on natural disasters, such as earthquakes and hurricanes. The difference, some observers say, is those are deemed acts of God while wildfires are often caused by people. “The vast majority of wildfires in California specifically are human caused,” said Michael Gollner, an associate professor researching fire at the University of California, Berkeley. While most ignitions are accidental, arson can play a role, he said.There are a lot of people who work on “wildfire prediction,” not for betting but because they can be so destructive, Gollner said. He added there is a lot of focus on figuring out where the highest fire risk is and then taking steps to reduce that risk.When asked about prediction markets for wildfires, California Department of Forestry and Fire Protection spokesperson David Acuña said department personnel are not permitted to use sensitive government information for personal financial gain, including participation in prediction markets, or to help others profit.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.