Senators seek ban on wildfire betting markets Play

When Pacific Palisades and Malibu burned last year, there were people on the Internet making money, gambling with each other about what the fire would do.

Now think about that. People online, wagering with each other about how much a fire will spread. What are the chances of someone taking action to make a fire spread further?

That's the grim news reported Tuesday morning by the Los Angeles Times.

As Malibu burned, as the Palisades was destroyed, as Altadena was aflame, a website called Polymarket was asking its customers to bet. How fast would the blazes grow? How long would it take to contain them? How much would be destroyed?

Polymarket accepted about $1.25 million in bets on how much of California would burn.

California's two U.S. senators, Alex Padilla and Adam Schiff, are urging the federal government to restrict such betting and prevent people from profiting on wildfires and other disasters.

Polymarket calls this futures trading. Critics say Polymarket and other gambling sites are magnets for insider trading. Someone could place a bet on a fire growing and make money as it burns more people out of their houses.

Experts say wildfire contracts can motivate people to commit arson.

The L.A. Times reports that a Polymarket spokesperson pushed back at some of the claims in the letter. Polymarket called the senators' letter "a misleading narrative based on markets we haven't offered for nearly 2 years."

The federal government is moving slowly, considering a ban on markets that go against the public interest.

One expert says the possibilities are obvious: "There's a reason these are called arson markets." Another calls the futures markets on fires "morally reprehensible."

A UC Irvine professor tells the L.A. Times, "You're essentially betting on a community's devastation and human suffering."