US Senators Push for Ban on Wildfire and Natural Disaster Betting

The political debate surrounding prediction markets in the United States has reached a new level of intensity. A group of Democratic Senators has officially approached the Commodity Futures Trading Commission (CFTC). Their goal is to stop the trading of so-called event contracts based on the occurrence of natural disasters. Wildfires, which regularly devastate large areas of the United States, are particularly in focus. Politicians see this as a moral line being crossed, as profits are made at the expense of human lives and destroyed property.

In a letter to CFTC Chair Michael Selig, the Senators are demanding clear guardrails to stop this trend. They argue that such betting markets are not only tasteless but pose a real threat to public safety. If people can bet that a fire will reach a certain size or destroy a town, criminals or desperate bettors might be tempted to intervene. The concern about arson as a means of maximizing profit is at the top of the list of concerns for the elected officials.

Numbers and facts

The dimensions of these bets are significant and not just theoretical. In their letter, Senators Adam Schiff, Alex Padilla, and six other colleagues cite concrete examples. For instance, more than $1.2 million was wagered on the outcome of the Palisades and Eaton fires in January 2025 on the Polymarket platform. These disasters had devastating consequences for the Los Angeles area. 31 people lost their lives, and more than 16,000 structures were razed to the ground. While families lost everything, anonymous traders on the blockchain-based platform speculated on the extent of the devastation.

Another report cited by the Senators highlights a new platform focusing specifically on wildfires in California. Its slogan is provocatively: You can't predict fire, but you can trade on it. So far, only simulated bets are offered there, but politicians fear a rapid expansion into real money stakes. It is seen as particularly critical that while Polymarket officially operates as an offshore site, US-based licensed markets, so-called Designated Contract Markets (DCMs), could soon follow suit if the CFTC does not intervene.

Background

The push against disaster betting is embedded in a series of legislative initiatives by Senator Adam Schiff. In March, he introduced the DEATH BETS Act. This legislation would prohibit CFTC-registered entities from listing contracts on terrorism, assassination, war, or an individual's death. Schiff is concerned with the integrity of financial markets and the protection of public morality. He also co-leads the Public Integrity in Financial Markets Act of 2026, which aims to prevent government employees from using insider information to bet on prediction markets.

"Offering bets on destructive wildfires threatens to minimize communities’ suffering all so the rich and powerful can profit. There’s also the heightened risk – according to state and local fire officials – that individuals could be tempted to commit arson in order to make sure their bets are successful." - Adam Schiff, United States Senator

Why it matters for German players

In Germany, the legal situation is very clearly regulated by the Interstate Treaty on Gambling 2021 (GlüStV 2021). Such macabre event bets on disasters or even deaths have no chance of approval in the regulated German market. Anyone playing with a provider on the official whitelist of the Gemeinsame Glücksspielbehörde der Länder (GGL) is protected from such excesses. The GGL strictly monitors which betting markets are permissible. Sports betting is allowed, but even here, there are narrow limits on live bets and events that are easily manipulated.

For German players, this means security. The deposit limit of 1,000 euros per month across all providers and the stake limit of 1 euro per round for virtual slots serve to protect players. The LUGAS system ensures that these limits are maintained. Those who operate on unregulated offshore sites like Polymarket enter a legal gray area and waive any player protection that is standard in Germany. The current debate in the US clearly shows why strict state supervision, as practiced by the GGL, is necessary to prevent socially harmful forms of betting.

What it means for GGL-licensed casinos

German online casinos and betting providers with a GGL license do not have to worry about such products being included in their catalog. On the contrary, the strict rejection of such bets by US politicians confirms the German path of restrictive regulation. Serious providers in Germany distinguish themselves through responsibility and transparency, not through speculation on human suffering. Current developments overseas could even lead to international regulatory authorities increasing their cooperation to further isolate illegal offshore platforms that offer such bets globally.