U.S. Senators Jeff Merkley (D-OR) and Ron Wyden (D-OR) sent a letter Monday to federal regulators requesting a prohibition on prediction market contracts related to wildfires. The lawmakers urged the Commodity Futures Trading Commission (CFTC), which oversees derivative markets, to prevent platforms from allowing users to wager on the duration and destruction of active fires.
The request follows a record-breaking wildfire season in Oregon, where over 2 million acres have burned. Senators from other states affected by wildfires joined Merkley and Wyden in the letter to CFTC Chair Michael Selig, expressing concern that financial incentives tied to fire outcomes could lead to public safety risks or arson.
According to the senators, platforms such as Polymarket have already facilitated millions of dollars in wagers on natural disasters. The letter cited more than $1 million bet on the 2025 Los Angeles wildfires and noted current active markets for events such as Category 5 hurricanes, volcanic eruptions, and Oregon’s drought status. These platforms allow participants to buy "yes" or "no" contracts on whether specific disaster thresholds will be met.
The scale of these markets is documented by specific platform data. Polymarket has seen over $232,000 in bets on hurricane and volcano outcomes, while a market regarding Oregon reaching an "exceptional drought" stage by August 31 has attracted $17,000 in wagers. For a single event like the Los Angeles fires, the $1 million total wagered represents a significant concentration of capital based on disaster duration and damage. If the CFTC acts on this request, participants in these markets would lose the ability to hedge or speculate on these specific environmental risks, and the platforms would face stricter limitations on the types of contracts they can offer to the public.
A ban would set a precedent for how the federal government treats "event contracts" involving natural disasters and public emergencies. Senators Merkley and Wyden have previously opposed betting on U.S. elections, suggesting this move is part of a broader effort to limit the scope of prediction markets in civic and environmental life. The CFTC has been given until August 14 to respond to the senators' inquiry regarding their plans to curb or ban wildfire betting. The outcome of this deadline will determine whether the commission initiates formal rulemaking or enforcement actions against these platforms.