Prediction markets allow you to bet on whether or not wildfires will burn down your city

Sylvie Andrews and her partner didn’t just lose the new home they helped build when the Eaton Fire swept through Altadena, California, in January 2025. Rather, they lost an entire decade of sacrifices they made to establish roots in their hometown, and the community they created. “We put in a lot of blood, sweat and tears,” Andrews said. “This is what we lost in the fire.”

This fire, along with the Palisades Fire to the west, destroyed more than 16,000 structures and killed 31 people. But as Andrews and thousands of Angelenos raced to evacuate, other people saw a financial opportunity. Using Polymarket, the world’s largest prediction market platform, they bet on the fires – how they will grow, how long they will last, and how much they will destroy.

Prediction markets are essentially gambling sites where people bet on the outcomes of events, including elections, sports, weather, and more. Everything is fair game, from oil prices and the spread of infectious diseases to international incidents. Markets usually formulate questions in a “yes” or “no” way, where the price of a “contract” fluctuates between $0 and $1. A price of 50 cents on a “yes” contract means that people betting collectively believe the event has a 50 percent chance of happening. Market hosts make money by charging fees for bets.

In January 2025, Polymarket listed nearly 20 questions, created by the platform’s “markets team,” related to the wildfires burning in Southern California. How many acres will the Palisades Fire burn by Friday, three days after it ignited Tuesday? Will the Palisades Fire reach Santa Monica by Sunday? When will the Palisades Fire be 50 percent contained? Will the Palisades and Eaton fires be contained before February?

People spent $1.2 million betting on these queries, according to Aeon Magazine. “Wow,” Andrews said over and over when she learned that number. “My first opinion is that this is morally reprehensible,” she said. “The fact that someone would feel good about doing this amazes me.”

“Prediction markets are just the Wild West,” said Susan Sherman, who grew up in Pacific Palisades. She lost her childhood home in the Palisades Fire. Her late parents had owned it since 1963, and now it’s gone. She sold the empty lot a few months ago. “I look at (betting on fires) as just being rude and heartless.”

As prediction markets boom and a new bushfire season begins, fire survivors and ethicists say betting encourages and rewards harsh thinking and dangerous behavior.

One of the major concerns stemming from wildfire forecasting markets is arson. “That’s what made me nervous,” Sherman said. In theory, the bet could give someone a perverse incentive to start a fire or help it grow. Unlike other disasters, such as hurricanes, floods or extreme heat, just one person can handle a fire in minutes. “Regulations that tie financial gains to wildfire outcomes risk encouraging abuse, including arson, and are not consistent with our mission,” a U.S. Forest Service spokesperson said.

“Imagine what a bad actor would do,” said Anne Skate, senior director of leadership ethics at Santa Clara University’s Markkula Center for Applied Ethics. “I think the market that would support this type of activity is a dangerous market.” Firefighters or land managers who have exclusive information about fire behavior or the agency’s firefighting plans could be tempted to bet on the fire, which could be considered insider trading.