Sylvie Andrews and her spouse lost their recently constructed home and ten years of hard work when the Eaton Fire swept through Altadena, California, in January 2025, along with the community they had built. “We invested a tremendous amount of effort into it,” Andrews revealed. “That’s what we lost in the blaze.” The Eaton and Palisades Fires obliterated more than 16,000 structures and resulted in 31 fatalities. While Andrews and others evacuated, some viewed it as an investment opportunity, wagering on the fires via Polymarket, the leading prediction market platform. Participants placed bets on the fires’ spread, duration, and devastation.

Prediction markets operate like gambling establishments for differing event results. From elections to sports to climate, anything can be wagered upon. Markets frame inquiries in a “yes” or “no” format, with prices fluctuating between $0 and $1. A price of 50 cents on a “yes” contract indicates a 50% probability of the event happening according to bettors. Market operators earn revenue by imposing fees on bets.

In January 2025, Polymarket featured nearly 20 wildfire-related questions for Southern California, established by the platform’s “markets team.” Inquiries covered the acreage the Palisades Fire would consume, whether it would reach Santa Monica, its level of containment, and if all fires would be under control by the beginning of February. Individuals wagered $1.2 million on these propositions, as reported by Aeon Magazine. “Wow,” Andrews repeatedly said upon discovering the sum. “It’s morally outrageous,” she remarked. “The notion that anyone could feel comfortable doing that astonishes me.”

Susan Sherman from Pacific Palisades, who lost her familial home in the Palisades Fire, commented, “The prediction markets are simply the wild, wild West,” describing the betting as “extremely crude and unfeeling.” As prediction markets expand with a new wildfire season, survivors and ethicists contend that betting fosters cold-hearted reasoning and reckless behavior. A key worry is arson fueled by these markets. Sherman voiced her concerns about this, emphasizing how easily someone could exploit fire for personal gain.

Systems profiting from wildfire outcomes may inadvertently promote misconduct like arson, which is contrary to the US Forest Service’s mission, as stated by their spokesperson. Ann Skeet from the Markkula Center for Applied Ethics cautioned about unscrupulous individuals leveraging such markets to provoke harmful actions, labeling such a market as perilous. Firefighters or land managers possessing unique fire insights might feel tempted to wager, creating concerns surrounding insider trading.