Betting on Wildfires: What Prediction Markets Mean for Disaster Victims

Online prediction markets are turning wildfire disasters into opportunities to place bets. Platforms like Polymarket allow users to make trades based on the outcomes of real-world events.

When people stand to make money from fires that endanger people’s lives, property, and businesses, the prediction markets raise serious ethical and safety questions. Arson could ignite more wildfires if people can profit from them on Polymarket.

Understanding Prediction Markets

Prediction markets are online platforms that work differently from traditional sports betting. Users buy and sell contracts based on the outcome of a future event.

The value of a contract ranges from $0 to $1 and shifts depending on the market’s expectations for the outcome. A $0.55 contract indicates the market currently believes there’s a 55% likelihood of the event happening.

The winning outcome pays out $1 per share. That means users can win more by betting on results that others consider unlikely.

These markets typically center around sports events and cryptocurrency markets, but have expanded into a variety of real-world events. People can now bet on things like election results and the words a public figure will use in a speech.

Around the globe, traders exchange nearly $24 billion a month on the two biggest markets, Kalshi and Polymarket, according to Pew Research Center.

At the same time, regulators have serious concerns about users manipulating the markets and acting on insider information to give themselves an unfair advantage, the New York Times reported. Dozens of users were flagged for this kind of profit-seeking behavior in 2026.

What Are Wildfire Prediction Market Contracts?

Wildfires are one type of real-world event that has become a subject of prediction markets on Polymarket (although they are not allowed on Kalshi, Polymarket’s competitor). Rather than simply asking whether a wildfire will happen, a prediction market can reward people for specific wildfire developments and outcomes.

Wildfire prediction markets may offer these kinds of contracts:

• How many acres will the wildfire burn?
• When will the fire be contained?
• Will the flames spread to a specific area?

During the 2025 Los Angeles wildfires, for example, Polymarket users placed more than $1 million in fire-related bets, ABC 7 reported. Contracts included answers to questions such as, “Will the Palisades Fire reach Santa Monica by Sunday?”

That means people were wagering on and profiting from a disaster that left 31 people dead and burned 59 square miles, destroying more than 16,000 buildings, per estimates from PBS.

Why Are People Concerned About Betting on Wildfires?

For victims who have experienced a wildfire, the idea of others betting on destruction that can threaten homes, communities, and lives is unsettling. In addition, wildfire prediction markets raise concerns because, unlike many events featured on prediction platforms, fires can be directly influenced by human actions.

Concerns about wildfire prediction markets include:

• Arson incentives: Someone could theoretically start a fire to influence a market outcome.
• Insider information: Officials, firefighters, and others with nonpublic information about a fire’s behavior or firefighting plans may have an unfair advantage when placing their bets.
• Interfering with firefighting: A person may take actions intended to speed how quickly a fire spreads or slow down containment.
• Minimizing human suffering: Betting on acres burned or communities threatened could make catastrophic events seem like abstract numbers rather than disasters affecting real people.
• Public safety: Fires are unpredictable and dangerous, and wildfire prediction markets could make the threat to communities even greater.

However, there is currently no evidence that anyone has started or interfered with a wildfire to profit from a prediction-market contract.

Ed Nordskog, a retired Los Angeles County Sheriff’s arson investigator and profiler, told CNN that only a small number of people commit arson, but said the combination of firesetting and gambling raises “disturbing possibilities.”

The concern has drawn attention from lawmakers. In August 2026, 9 U.S. senators warned of the dangers presented by wildfire contracts in a letter to the chair of the Commodity Futures Trading Commission, as reported in the Washington Post.

“Offering bets on destructive wildfires threatens to minimize communities’ suffering, all so the rich and powerful can profit,” the senators stated.

Get Legal Support After Wildfires

For people whose homes, property, and lives have been affected by a wildfire, seeing others treat that destruction as a source of profits can be deeply upsetting. As you stay up to date on wildfire news, it’s important to remember that you may qualify for a wildfire lawsuit if you’re harmed by a fire ignited due to negligence.

Fire Help Center can help you understand your options. Contact us today for a free case review or call our team at (866) 866-0753 to discuss your wildfire losses and learn whether you may have grounds for a legal claim.