Prediction markets allow people to bet on wildfires. Experts fear it will fuel arson
Prediction Markets Allow People to Bet on Wildfires: Experts Warn of Arson Risks
When Climate Disasters Become Investment Opportunities
Prediction markets allow people to bet on real-world events with increasing frequency, and wildfires have become a prime target. As the Eaton fire devastated Altadena, a Los Angeles community, tragedy struck for many residents. Among those affected was Kaitlyn Trudeau’s grandfather, whose residence was completely consumed by flames. While he faced the emotional toll of losing his home, a different kind of response emerged from the financial world. By January 2025, as wildfires continued to burn across Los Angeles, participants began wagering on Polymarket, a prominent prediction market platform. These individuals placed money on various outcomes: the total acreage affected, specific neighborhoods impacted, and the timeline for containment efforts.
Trudeau, who serves as a climate scientist at the nonprofit Climate Central and resides in California, described the phenomenon as unsettling. She noted that starting fires has never been particularly difficult, but now financial motivations may compound that ease. During a recent visit to Altadena to view her grandfather’s former home, she shared her concerns with CNN about how prediction markets might alter human behavior during fire seasons.
How Prediction Markets Work for Wildfire Betting
Polymarket operates within a rapidly growing industry valued in the billions. This platform enables participants to wager on virtually any anticipated event, ranging from sports outcomes and electoral results to the frequency of social media activity by public figures like Elon Musk. Beyond traditional categories, these markets have expanded to include climate-related events, particularly wildfires.
The company distinguishes its model from conventional gambling. Rather than using the term “bets,” Polymarket describes its activity as trading on future outcomes. Participants compete against one another rather than against a central house. The platform’s team develops markets through user input, creating questions with typically binary answers. Users purchase shares representing potential outcomes at prices ranging from zero to one dollar. When “yes” shares trade at $0.65, for instance, the market indicates a 65 percent probability of that outcome occurring. Correct predictions receive payouts of one dollar per share.
“People turn to the news for commentary and they come to Polymarket for information,” a company spokesperson explained. “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.”
Expert Concerns About Behavioral Changes
Lauren Ducat, an Australian clinical and forensic psychologist who specializes in firesetting research, noted that weather-related wagering predates the internet era. However, digital platforms have made these activities more widespread and accessible to broader audiences. Despite Polymarket’s claims of distinction from gambling, experts remain concerned about potential consequences.
Ed Nordskog, a retired arson investigator and profiler from the Los Angeles County Sheriff’s Department, emphasized that wildfires differ from other natural disasters because humans can directly influence them. “Anybody can set a wildfire,” he stated. While acknowledging that arson represents a small fraction of fire incidents, Nordskog highlighted a notable correlation between compulsive gambling and fire-setting behavior. He observed that many arsonists establish fires near casinos they visit regularly.
“I worry that it encourages people to think about these events like they are video games, not real-world disasters,” Trudeau said.
Real-World Implications of Wildfire Betting
Concerns extend beyond intentional fire-setting. Individuals might manipulate existing fires to maximize their returns. A firefighter could theoretically allow flames to spread further to increase the likelihood of winning a bet on total acreage burned. Reports suggest some participants are taking extraordinary measures to ensure favorable outcomes.
Recent incidents at Charles de Gaulle airport in Paris illustrate this phenomenon. Sensors recorded unexpected temperature increases on April 6 and again on April 15. These measurements influenced Polymarket trading activity, demonstrating how localized events can affect global prediction markets.
WyldFyre represents another platform in this space, focusing specifically on California wildfires with the slogan: “You can’t predict fire. But you can trade on it.” Although it currently operates without traditional currency, experts caution that these platforms send important signals about how society perceives natural disasters.
The debate continues as researchers gather more data on how prediction markets allow people to bet on climate events. Trudeau and other experts hope that increased awareness will help communities understand both the benefits and risks of turning disasters into tradable commodities. As these platforms grow, the question remains whether financial incentives will ultimately help or harm wildfire prevention efforts.
