Polymarket Users Gambled More Than $1.2 Million On Los Angeles Firestorms Last Year in What’s Been Called an ‘Arson Market’

Polymarket users reportedly gambled more than $1.2 million on the Los Angeles fires in 2025. Experts are calling it an “Arson Market” and the phenomenon has authorities calling for an investigation.

The Los Angeles Times uncovered the details of Polymarket prediction market instances concerning the Palisades and Eaton fires that killed 31 people. Users place “event contracts” that ask questions about possible scenarios related to global events. Before, Polymarket had prediction markets on medical trials, and other controversial topics. In this case, the Polymarket fans wagered on “how long would it take to contain the blaze?” Or, “How much would be destroyed?”

This activity came with comments from users saying things like “That was fun. Thanks everyone. Until next time!” according to The Los Angeles Times. As more details surface, nine senators are calling for action and have penned a letter to the U.S. Commodity Futures Trading Commission to inquire about regulating Polymarket:

Why do they call these Arson Markets?

They added: “As the United States faces yet another record-breaking fire season this year, the Commodity Futures Trading Commission (CFTC) cannot allow these prediction markets to offer unrestricted betting on wildfires. While these bets appear to be offered only on the offshore Polymarket site, it is only a matter of time before other U.S. based Designated Contract Markets (DCMs) try to offer these. The CFTC must lead the charge to rein in these contracts in the U.S. and offshore and put in place common-sense guardrails to prevent people from profiting as wildfires threaten communities.” 

While L.A. burned, people were betting on the wildfires.

More than $1.2 million was wagered on the Eaton and Palisades fires, including bets on how much destruction they would cause. What could go wrong? https://t.co/VQqD4WZuDA

— Los Angeles Times (@latimes) August 18, 2026

Rutgers University associate History professor Jamie Pietruska harbors concerns that this kind of betting could motivate people to commit arson, saying: “There’s a reason these are called arson markets.” For their part in the fervor, Polymarket published an advertisement earlier this year that read: “You can’t predict wildfire. But, you can trade on it.” This activity has led to Polymarket rushes during the current Iran conflict.

As more concerns bubble up, a Polymarket spokesperson penned a response. “Polymarket is a derivatives exchange with peer-to-peer markets where we don’t set lines, take the other side of trades, or profit from outcomes. When tragedy unfolds, people turn to the news for commentary and they come to Polymarket for information,” the message reads. “While we are not blind to the risks, removing these markets does not prevent a tragedy but makes the most accurate information less accessible to the people who need it most.”

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