[DigitalToday reporter Yoonseo Lee (이윤서)] Nine Democratic U.S. senators urged the Commodity Futures Trading Commission (CFTC) to ban prediction-market contracts related to wildfires.

On Aug. 6 (local time), blockchain media outlet Decrypt reported that the lawmakers argued betting on wildfires could lead to incentives for arson, insider trading and damage to public safety.

Senator Jeff Merkley and Senators Alex Padilla and Adam Schiff, among others, sent a letter earlier this week to CFTC Chairman Michael Selig, calling for a ban on wildfire-linked event contracts. They said such markets turn natural disasters into profit opportunities and risk increasing real-world harm.

In the letter, the senators said, "Betting on wildfires not only diminishes the suffering of communities, but can also increase the profits of wealthy and influential people." Citing concerns from state and local firefighting authorities, they warned that people "could attempt arson" to win bets.

The criticism is rooted in actual trading cases. The lawmakers said Polymarket took in more than $1.2 million in bets tied to the 2025 California Palisades wildfire and Eaton wildfire. They also said other new platforms allow bets featuring wildfires, criticising them for turning real incidents into wagering targets.

The call comes as legal and political pressure is growing on prediction markets more broadly. Prediction markets are structured so users buy and sell contracts on whether future events will occur. In recent years, they have rapidly expanded their influence by covering topics from cryptocurrency price moves to geopolitical events.

The pace of market growth is also accelerating. In April, investment bank Bernstein forecast that annual trading volume could reach $1 trillion by 2030 if inflows of institutional investors increase. In the same month, U.S. President Donald Trump also stepped back from his earlier stance criticising prediction markets for turning the world into a casino.

But confusion over regulatory authority is deepening. In May, Minnesota became the first U.S. state to ban prediction markets at the state level, but the CFTC and the Justice Department later filed a lawsuit saying the law conflicts with federal authority. In June, Kentucky sued Kalshi and Polymarket, claiming they are illegal sports betting platforms, and a federal judge in Michigan ruled that sports prediction markets are not regulated by the CFTC.

The senators said the CFTC should set standards before next year's wildfire season begins. They said, "For now, these bets appear to be offered only on offshore Polymarket, but designated contract markets in the United States could soon seek to offer them," and called for common-sense safeguards to curb such contracts inside and outside the United States. They added that in this situation, calls to ban wildfire betting are increasingly likely to lead to a debate beyond a specific product over who oversees prediction markets and what should be permitted.