Prediction markets allow people to bet on wildfires. Experts fear it will fuel arson

Prediction Markets Spark Concerns Over Wildfire Arson Incentives

Prediction markets allow people to bet – As the Eaton fire devastated the Altadena community in Los Angeles, the tragedy claimed nineteen lives and reduced thousands of structures to ashes. Among the destroyed properties was the residence of Kaitlyn Trudeau’s grandfather. While he struggled with the emotional aftermath of losing his home, a different kind of response emerged from the financial world. By January 2025, as flames consumed parts of Los Angeles, individuals began placing wagers through Polymarket, a prominent prediction market platform. Participants staked money on variables such as total acreage burned, geographic spread of the fires, and containment timelines.

Trudeau, who serves as a climate scientist for the nonprofit Climate Central and resides in California, described the phenomenon as unsettling. Speaking with CNN during her visit to Altadena to view her grandfather’s former home, she noted that starting fires has become potentially lucrative. “It’s not just easy to start a fire — now there’s potentially a financial incentive,” she explained. This sentiment reflects growing anxiety among experts who worry that prediction markets may encourage arson while simultaneously creating emotional distance between the public and wildfire victims.

“I worry that it encourages people to think about these events like they are video games, not real-world disasters,” Trudeau said.

Polymarket operates within a multibillion-dollar sector that enables wagering on virtually any anticipated outcome. Beyond sports and elections, the platform allows participants to trade on climate-related events. The company defends its model as an information resource rather than mere gambling. A spokesperson emphasized that while risks exist, eliminating these markets would reduce access to valuable data during crises. “People turn to the news for commentary and they come to Polymarket for information,” the representative stated. “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.”

How Prediction Markets Work

According to Polymarket’s framework, users do not technically “bet” but rather “trade on future event outcomes.” Participants compete against one another instead of a traditional house. The platform generates markets through user input, posing questions typically answered with yes or no responses. Users purchase shares valued between zero and one dollar. When yes shares trade at sixty-five cents, the market indicates a sixty-five percent probability of that outcome occurring. Correct predictions receive payouts of one dollar per share.

Lauren Ducat, an Australian clinical and forensic psychologist researching firesetting behavior, noted that weather wagering predates the internet era. However, digital accessibility has expanded these opportunities significantly. “The accessibility of online platforms has the potential to make these wagers more pervasive and open them to larger markets,” she observed.

Human Influence on Wildfires

Unlike natural disasters such as earthquakes or hurricanes, wildfires can be directly manipulated by human action. Ed Nordskog, a retired Los Angeles County Sheriff’s arson investigator, highlighted this vulnerability. “Anybody can set a wildfire,” he stated. Drawing from his experience, Nordskog identified correlations between compulsive gambling and fire-setting behaviors. He reported observing arsonists who frequently ignite flames near casinos they visit regularly. Though only a small fraction of individuals commit arson, he warned that the connection presents “some disturbing possibilities.”

“A surprising number of (arsonists) set their fires near casinos that they frequent on a daily basis,” Nordskog said.

Beyond intentional arson, existing fires might also be influenced by financial motivations. Firefighters could theoretically allow blazes to persist longer to secure higher payouts on acreage predictions. Evidence suggests some individuals are already taking extraordinary measures to obtain rewards. On April 6 and again on April 15, temperature sensors at Paris’s Charles de Gaulle airport recorded unexpected heat spikes. These anomalies affected Polymarket trading activity, prompting speculation about potential manipulation.

Another platform called WyldFyre concentrates specifically on California wildfires with the slogan “You can’t predict fire. But you can trade on it.” Though it currently operates without real-world currency, experts remain concerned about the signals these platforms send to society regarding how we value and respond to natural disasters.