Democratic senators want the Commodity Futures Trading Commission (CFTC) to stop betting on California wildfires. They warn that traders could start fires to win their bets.
The letter went to CFTC Chairman Michael Selig on Monday. Oregon Senator Jeff Merkley led it. It points back to wagers placed while Los Angeles burned in January 2025.
$1.2 Million Wagered While California Wildfires Burned
The Palisades and Eaton fires killed 31 people. They destroyed 16,246 buildings, according to CAL FIRE figures.
Polymarket is the largest betting site for real-world events. It opened its first wildfire bet on January 8, 2025. The fires had started a day earlier.
Traders put $1.2 million into roughly 20 questions. Rutgers historian Jamie L. Pietruska tracked the total.
One bet took $711,587 of that. It asked a single thing. When would the Palisades Fire be fully contained?
The biggest pool inside it was $274,797. That money sat on the latest date offered.
In plain terms, traders paid the most to bet firefighters would be slow.
The bet was settled using data from fire.ca.gov, in accordance with its published rules. That is the website of CAL FIRE, the state firefighting agency.
CAL FIRE hands over that data. It refuses to take anything back from these markets.
“Systems that tie financial gain to wildfire outcomes risk encouraging misuse, including arson, and are not compatible with our mission,” US Forest Service spokesperson, reported by High Country News.
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Fire Is Easier to Rig Than a Thermometer
In April, a Polymarket trader bet $119 on the weather in Paris. He walked away with $21,398. A sensor at Charles de Gaulle Airport had spiked for no clear reason. Météo-France called in the airport police.
The trick is old. In 1950, St. Louis police shut down a weather betting ring worth $2.6 million a year. Gamblers back then bribed officials to fake temperature records.
The Paris weather sensor case shows that one number can still settle a bet.
Fire is worse. Nobody can start a hurricane by hand.
Prosecutors have charged a 29-year-old man with starting the Palisades Fire. He faces up to 45 years and has pleaded not guilty.
Firefighters also know things outsiders do not. That echoes earlier insider trading on Kalshi claims. Polymarket added an on-chain detection system in May.
Why the CFTC Rules Never Mention Fire
The CFTC proposed a new rule on June 10. It checks each contract one at a time.
The test covers terrorism, assassination, war, gaming, and illegal activity. Comments closed on July 27.
Wildfire never made the list.
Arson is illegal. But these bets ask about containment dates, not the crime. That gap is what the senators want closed.
Polymarket has defended the markets. Founder Shayne Coplan told CBS News they carried the least risk and gave the most information. He added that he understood the sensitivity.
The Los Angeles bets ran offshore, where US traders were locked out. Wyldfyre, a play-money site built only for California fire risk, went offline last month.
The CFTC now has one question to answer. Is fire different from weather?