In California, wildfire wagers are booming, and experts fear an arson incentive

As California communities continue to recover from catastrophic fires, experts are growing concerned as prediction-market platforms and futures betting are letting users wager on wildfire outcomes. Some are claiming the practice turns disasters into a game and could create troubling incentives.

What's happening?

According to CNN, during the January 2025 Eaton fire in Altadena, California — a devastating blaze that killed 19 people and destroyed thousands of structures — users on Polymarket were also placing bets on wildfire-related outcomes.

Those trades centered on questions such as how much land the fires would consume, where the flames could move, and when containment might be reached. 

Kaitlyn Trudeau, a California-based climate scientist at nonprofit Climate Central, told CNN that her grandfather was one of the people who lost his home in the fire. Trudeau called the practice of betting on natural disasters "pretty dystopian," adding that it could even offer individuals a financial incentive for sparking wildfires.  

"I worry that it encourages people to think about these events like they are video games, not real-world disasters," Trudeau told CNN.

Polymarket, for its part, said the platform is meant to provide insight rather than spectacle. "People turn to the news for commentary and they come to Polymarket for information," a spokesperson told CNN.

The platform is part of a much broader rise in prediction markets and online betting, where users can speculate on everything from elections to sports to weather. That broader boom has also raised concerns about predatory design practices, aggressive advertising, financial risk, and how easy real-time betting has become for consumers on platforms like Polymarket and Kalshi.

Why does it matter?

Wildfires are different from many other disasters because people can directly affect whether they start or how they unfold. Ed Nordskog, a former arson investigator and profiler with the Los Angeles County Sheriff's Department, put it bluntly while speaking to CNN: "Anybody can set a wildfire."

He told the outlet that arson is committed by only a very small share of people, but he also pointed to a notable connection between compulsive gambling behavior and firesetting. In that context, Nordskog said, "This has some disturbing possibilities," especially if people think they could profit from a fire growing or remaining active longer.

Other experts focused on the ethical message these markets send. Ann Skeet, a Santa Clara University's senior director of leadership ethics, said to CNN, "Betting on someone's potential death or harm devalues human life." 

Theresa Gannon, a forensic psychology professor at the University of Kent, warned, as reported by CNN, that such speculation could make fire seem more normal and further separate people from the real suffering it causes.

Concerns about influencing outcomes have surfaced beyond wildfire markets, too. CNN reported that suspicious temperature spikes recorded at Charles de Gaulle Airport in Paris in April triggered payouts on Polymarket weather contracts. Some observers speculated that someone may have artificially influenced the readings by using a hairdryer to heat temperature sensors at the airport, which the trading platform relied on to track regional weather conditions.

What's being done?

Some experts believe prediction markets may still have value if strict limits are in place. CNN reported that Kim Kaivanto, an economist at Lancaster University Management School, runs a climate-risk forecasting market called CRUCIAL, where expert teams do not use real money and instead earn credits for providing accurate information.

Even so, wildfire agencies told the outlet they are not using these markets. A spokesperson for the California Department of Forestry and Fire Protection said its modeling is "not informed by markets, wagering systems, crowd predictions, or any other form of prediction-market mechanism." The U.S. Forest Service similarly said, "We do not rely on any system that treats wildfire as an event for speculation."

Lawmakers have also started to respond. CNN reported that in March, California Gov. Gavin Newsom expanded a state-official insider-trading ban to cover prediction-market platforms. Representatives from Utah and California have also introduced bipartisan legislation targeting trades tied to "terrorism, assassination, war, gaming… or illegal activity," the outlet reported.

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