Prediction markets allow people to bet on wildfires. Experts fear it will fuel arson
Prediction Markets Allow People to Bet on Wildfires: Arson Risks Grow
Disaster Trading Creates New Financial Incentives
Prediction markets allow people to bet on real-world events, and wildfires have become a major focus. Last year, the Eaton fire devastated Altadena, a Los Angeles neighborhood, killing nineteen people and destroying thousands of buildings. Among the casualties was the home of Kaitlyn Trudeau’s grandfather. While he dealt with the personal loss, others saw opportunity in the destruction.
During January 2025, as flames swept through Los Angeles, users flocked to Polymarket, a leading prediction market platform. They wagered on outcomes including total acreage burned, affected regions, and containment timelines. Trudeau, a California-based climate scientist at Climate Central, called the trend “pretty dystopian.” She told CNN that financial motives now join traditional causes: “It’s not just easy to start a fire — now there’s potentially a financial incentive.”
Trudeau later visited her grandfather’s charred property in Altadena for the first time since the blaze.
Understanding How Prediction Markets Work
Polymarket operates within a multibillion-dollar industry where prediction markets allow people to bet on nearly any future occurrence. Though sports and elections dominate most platforms, wildfire predictions are gaining traction. The system works simply: creators pose yes-or-no questions, and buyers purchase shares valued between zero and one dollar. If “yes” shares cost $0.65, the market assigns a sixty-five percent likelihood to that outcome. Winners receive one dollar per share.
“People turn to the news for commentary and they come to Polymarket for information,” a Polymarket 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.”
The platform differentiates itself from conventional gambling by highlighting that users “trade on future event outcomes” against each other rather than against a house.
Psychological and Behavioral Concerns
Lauren Ducat, an Australian clinical and forensic psychologist specializing in firesetting, pointed out that wagering on weather spans centuries. Yet she noted that digital platforms make these bets “more pervasive and open them to larger markets.”
Trudeau shared her concern that prediction markets allow people to bet in ways that change perception: “I worry that it encourages people to think about these events like they are video games, not real-world disasters.”
Ed Nordskog, a retired Los Angeles County Sheriff’s arson investigator, emphasized what makes wildfires unique. “Anybody can set a wildfire,” he said, contrasting them with hurricanes or earthquakes that humans cannot control. Though Nordskog usually minimizes arson threats given their rarity, his research found connections between gambling addiction and fire-setting. “A surprising number of (arsonists) set their fires near casinos that they frequent on a daily basis,” he noted.
Secondary Effects and Real-World Examples
Beyond direct arson, experts identify additional risks. Firefighters could face subtle pressure to let fires burn longer, potentially earning larger payouts on acreage wagers. Reports indicate some individuals are already taking extreme steps to influence outcomes.
On April 6, 2025, temperature sensors at Paris’s Charles de Gaulle airport captured an unexplained temperature increase of several degrees Fahrenheit. This pattern recurred on April 15. The unusual readings moved Polymarket trading significantly, sparking speculation about possible manipulation.
WyldFyre, another platform focused solely on California wildfires, operates under the slogan: “You can’t predict fire. But you can trade on it.” Though WyldFyre currently excludes real currency, experts believe these platforms reveal important insights about societal attitudes toward fire events.
Nordskog admitted that thorough data remains scarce but cautioned that “this has some disturbing possibilities” for the future of wildfire prevention and public safety.
