Nevada senators seek CFTC crackdown on wildfire-linked prediction market contracts
Nevada senators are pressing the CFTC to block event contracts tied to natural disasters after California wildfires generated $1.3 million in wagers on prediction markets. The lawmakers want the agency to prevent regulated exchanges from listing contracts that let users profit from catastrophic events such as wildfires. They are also urging action against offshore venues offering similar contracts. The push adds a new natural-disaster category to the growing list of event-contract types facing political and regulatory scrutiny.
Wildfire contracts are a fresh target in the broader fight over what CFTC-registered platforms may list. The senators' push gives state attorneys general and critics like the NFL another category to point to when arguing that event contracts should be treated as gambling under state law rather than federally preempted derivatives. The CFTC's proposed swap classification would arm the agency with a clearer preemption argument, but that rule faces months of White House review while state courts move in weeks.
Kalshi already lost preemption in Ohio and Tennessee, and Polymarket faces an open New York suit. Every new contract category under political attack — sports, now wildfires — expands the set of precedents state enforcers can cite. Platforms must weigh whether to geofence disaster-linked markets preemptively or defend them state by state and absorb the legal cost.