US Debate Over Betting on Wildfires Intensifies

Washington – 06.08.2026: Online prediction betting platforms in the United States are coming under pressure over their wildfire offerings. Users can bet on the scale, duration or individual consequences of fires. The offerings are referred to as tradable event contracts. They are therefore organized differently from traditional sports betting, but likewise allow gains or losses depending on whether a specific event occurs.

Criticism is directed primarily at possible perverse incentives. If stakes depend on the spread of a fire or on specific damage thresholds being exceeded, a financial interest in the worsening of the disaster may arise. No specific case in which a wildfire was started because of such a bet has been documented so far. Nevertheless, the possibility of manipulation is being treated as a serious risk in the political debate.

The practice received particular attention after the devastating Palisades and Eaton fires in the greater Los Angeles area in January 2025. According to several US media outlets, bets totaling more than $1.2 million were placed on Polymarket regarding the two fires. Among other things, users bet on the development and consequences of the fires. The disaster claimed numerous lives and destroyed thousands of buildings. This connection in particular fuels the accusation that human suffering is being turned into an object of short-term speculation.

Providers, by contrast, argue that prediction markets can aggregate dispersed information and make probabilities visible. However, such prices have no recognized operational role in disaster management. US wildfire authorities do not classify betting markets as an instrument for hazard forecasting. The US Forest Service relies on scientifically validated models as well as data from the National Weather Service, the weather and oceanographic agency NOAA, and the National Interagency Fire Center for its situation assessments. Warnings, evacuations and operational decisions therefore continue to be based on meteorological measurements, fire models and official situation reports.

From a regulatory perspective, the situation is disputed. The Commodity Futures Trading Commission, or CFTC, generally treats event contracts as financial products and is reviewing rules for the rapidly growing market. The agency initiated proceedings for new requirements in March 2026. These concern market integrity, the handling of non-public information and the question of which contracts conflict with the public interest.

At the same time, several states are seeking to impose stricter limits on prediction platforms, while the CFTC defends its nationwide jurisdiction. The dispute is increasingly extending to bets on weather events and natural disasters. In the case of wildfires, it touches on a particularly sensitive boundary: contracts can respond to developments known to people with insider knowledge or, in the worst case, developments they could influence themselves. However, no link between the fire bets on offer and any specific arson attack has been proven so far.