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Nine Democratic senators urge CFTC to ban wildfire prediction market contracts

Nine Democratic senators urge CFTC to ban wildfire prediction market contracts

Lawmakers asked the derivatives regulator to block wildfire event contracts as trading volumes rise and disputes involving Polymarket, Kalshi and state authorities deepen uncertainty over prediction market oversight.

Fact Check
The primary source—Senator Merkley's official Senate press release dated August 3, 2026—names exactly nine senators (Merkley, Padilla, Shaheen, Schiff, Rosen, Cortez Masto, Heinrich, Wyden, Klobuchar), all Democrats, who urged the CFTC to restrict/ban wildfire prediction market contracts. It explicitly cites the risks of arson, insider trading, and profiting from disasters, matching the claim. Independent corroboration from KPTV and Decrypt confirms the count, the recipients (CFTC), and the cited concerns. All elements of the claim are directly supported by the primary official source.
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Summary

Nine Democratic senators asked the CFTC, the U.S. derivatives regulator, to prohibit wildfire-related prediction market contracts, saying the products could encourage arson, create insider trading risks and allow traders to profit from natural disasters. In a letter to CFTC Chair Michael Selig, Sen. Jeff Merkley (D-Ore.), Sen. Alex Padilla (D-Calif.), Sen. Adam Schiff (D-Calif.) and six other Democratic senators urged the agency to act before next year's wildfire season and warned that U.S.-based Designated Contract Markets (DCMs) could eventually try to list similar products even if the bets currently appear to be offered on the offshore Polymarket site. The lawmakers cited reports that Polymarket handled more than $1.2 million in wagers tied to California's Palisades and Eaton fires in 2025 and said newer platforms are also offering wildfire bets. Their appeal comes as prediction markets expand rapidly and face heavier scrutiny from lawmakers and regulators. Investment bank Bernstein said in April that annual trading volume could reach $1 trillion by 2030 as more institutional investors enter the market. That same month, President Donald Trump softened earlier criticism after previously saying prediction markets had turned the world into "a casino." In May, Minnesota became the first state to ban prediction markets before the CFTC and Department of Justice sued the state, and in June Kentucky sued Kalshi and Polymarket while a federal judge in Michigan ruled that sports prediction markets are not regulated by the CFTC, adding to uncertainty over oversight.

Terms & Concepts
  • CFTC: The U.S. regulator that oversees futures, options and other derivatives markets.
  • prediction markets: Platforms where traders buy and sell contracts tied to whether future events happen.
  • Designated Contract Markets (DCMs): CFTC-regulated exchanges that can list futures and other event-based contracts.