While the Eaton and Palisades fires tore through Los Angeles County in January 2025, killing 31 people and leveling more than 16,000 structures, a parallel drama was playing out on Polymarket. Bettors placed over $1.2 million in wagers tied to outcomes of the fires, turning one of California’s worst natural disasters into a speculative event with odds and payouts.
The volume was roughly ten times greater than what a recent San Francisco Giants game attracted on the same platform.
What people were betting on
The Polymarket contracts weren’t just simple over-under bets on acreage. Bettors could wager on how many acres would burn by specific deadlines, whether the fires would spread to particular geographic areas, and when containment would be achieved.
Some reports put the total wagering volume as high as $1.3 million.
Senators push back hard
Nine US senators decided the line had been crossed. California’s Adam Schiff and Alex Padilla helped lead a letter to the Commodity Futures Trading Commission demanding either strict regulatory limits or a complete shutdown of prediction markets tied to wildfires.
The senators’ central concern went beyond taste. They flagged the possibility that wildfire betting markets could create perverse incentives, including the scenario where someone might commit arson to profit from a prediction market position.
Polymarket’s regulatory tightrope
This isn’t the first time Polymarket has drawn scrutiny for the types of markets it hosts. The platform previously settled with the CFTC in 2022 over operating an unregistered trading facility, paying a $1.4 million fine. Since then, it has restructured its operations to technically restrict US-based users while continuing to grow its global footprint.
Kalshi, Polymarket’s more regulation-friendly competitor, recently won a court battle allowing it to list political event contracts in the US.