Lawmakers Urge Regulation of Prediction Markets Tied to Disasters
A group of U.S. lawmakers has asked federal regulators to intervene in prediction markets that allow betting on natural disasters, including wildfires.
A coalition of U.S. lawmakers has called on federal regulators to intervene in prediction markets that facilitate betting on natural disasters, such as wildfires. Senator Jeff Merkley of Oregon led the group in requesting the Commodity Futures Trading Commission (CFTC) to implement "common-sense guardrails" for these markets.
The lawmakers are concerned that prediction markets can create perverse incentives and commodify human suffering. They warn that such markets may encourage individuals to actively influence events to ensure their bets are successful, potentially leading to devastating consequences. Specific concern is raised regarding bets on wildfires, with lawmakers fearing that gamblers might be tempted to start fires to guarantee their winnings.
Betting on wildfire outcomes is not unprecedented. During last year's fires in Los Angeles, prediction markets saw over a million dollars traded, with users making specific bets on fire scope and duration. Lawmakers are particularly worried about the current severe wildfire season, which has begun unusually early.
States are also taking action. California and Utah have proposed legislation to ban betting on events like terrorism or illegal activities. In Utah, a court has already ruled that the state can crack down on prediction markets using existing anti-gambling laws.