Nine Democratic US senators sent the Commodity Futures Trading Commission a letter on August 3, 2026, demanding it ban wildfire-outcome contracts on Polymarket and other prediction markets by August 14. The senators, led by Oregon's Jeff Merkley, argue the contracts create a financial incentive for arson.
The letter went to CFTC Chair Michael Selig and was also signed by Alex Padilla, Jeanne Shaheen, Adam Schiff, Jacky Rosen, Catherine Cortez Masto, Martin Heinrich, Ron Wyden and Amy Klobuchar. It points to Polymarket's own record: the platform took in more than $1.2 million on contracts tied to the Palisades and Eaton fires that tore through the Los Angeles area in January 2025, killing 31 people and destroying more than 16,000 structures.
Why now
The CFTC opened a rulemaking in June 2026 on which event types belong on its list of contracts contrary to the public interest - and left natural disasters off it. That gap is what the senators are asking the agency to close before their own August 14 deadline runs out. Their letter cites state and local fire officials who warn of a heightened risk that someone could be tempted to commit arson to make sure a wildfire position pays off.
Specifically, the senators want the CFTC to bar its Designated Contract Markets - the regulated exchanges it licenses to list futures and event contracts - from offering wildfire contracts, extend that curb to offshore platforms serving US customers, formally assess whether the contracts serve the public interest, and issue enforcement guidance so the rule has teeth. Their letter argues that trading on destructive wildfires risks minimizing communities' suffering so that, in the senators' words, "the rich and powerful can profit."
Polymarket pushes back
Polymarket defended the contracts in a statement responding to the letter. "When tragedy unfolds, people turn to the news for commentary and to Polymarket for information," the company said, adding that "while we recognize the risks associated with these markets, removing them does not prevent a tragedy," and that pulling the contracts "only makes timely, market-based information less accessible to those seeking to understand what may happen next."
The fight lands inside a bigger one. The CFTC's broader rulemaking on prohibited-contract categories is still open, and August 14 is now a real deadline on the calendar, not a vague ask. Whatever the agency decides on wildfires is likely to set the template for how it treats other disaster and public-safety contracts next.
