Polymarket Criticized For Accepting Los Angeles Wildfire Bets

Polymarket, a crypto-based prediction market, is being criticized for creating a betting market on the deadly Los Angeles-area wildfires. The fires have killed at least 24 people and destroyed an estimated 12,000 homes, businesses and other structures.

According to The Wall Street Journal, some people on X have suggested these betting options create “perverse incentives for people to fuel the fires further in order to profit from their bets.”

Bill Shaiken, a Los Angeles Times sportswriter, said Polymaket should be condemned for “betting on tragedy” and “profiting off the pain of our community.”

A Polymarket spokesperson said the company’s wildfire options “address the same questions being discussed across cable news and X, but replace the punditry and speculation with transparent, probabilistic forecasts,” the newspaper reported.

'Pushing The Envelope'

Early this week, Polymarket was still accepting L.A. fire-related bets online. On Polymarket’s website, a “Wildfire” tab directs users to those bets, including:

• When will the Palisades fire be contained: Jan. 19 or Jan. 31.
• Karen Bass out as mayor of LA before April: Yes or No.

Pacific Palisades, home to Hollywood celebrities and many others near the Pacific Ocean, is one of the areas hit hardest by wildfires that began last week and continue to scorch large areas north of downtown Los Angeles. Fueled by dry conditions, other fires are expected to flare up this week under another round of strong winds.

The mayor has been criticized for being in Ghana when the fires erupted. Flames quickly spread into residential areas, displacing thousands of residents. Bass has returned to Los Angeles from overseas. Since then, she has faced questions about previous budget cuts to the fire department.

The Wall Street Journal reported that New York-based Polymarket has “a history of pushing the envelope on good taste by launching betting markets on controversial topics.”

For instance, Polymarket allowed bets on whether Luigi Mangione, arrested in the killing of UnitedHealthcare’s chief executive, would plead guilty in the incident. He pleaded not guilty.

While Polymarket is banned in the U.S., traders say the ban can be circumvented, according to the newspaper.

In the sports world, pro teams based in Los Angeles, including in the city’s NBA and NHL teams, have postponed home games while wildfires continued to burn in the metropolitan area. Monday’s NFL playoff game between the Los Angeles Rams and Minnesota Vikings was moved from the Rams’ home stadium to Arizona for the same reason. After winning that game, 27-9, the Rams will travel to Philadelphia to face the Eagles on Sunday in the next playoff round.

Donald Trump Jr. Named Adviser To Prediction Market Firm

This week, the prediction market company Kalshi named Donald Trump Jr. as an adviser. He is the eldest son of President-elect Donald Trump.

On CNBC’s “Squawk Box,” Kalshi CEO Tarek Mansour said Trump Jr. is “very in tune with what the American people feel and want.”

“Don has always been at the forefront at these types of spaces and new technologies,” Mansour said.

Proponents of prediction markets note they move more quickly than traditional polling in reflecting public opinion. Trump Jr. indicated that is one reason he wanted to work with Kalshi.

“On Election night at Mar-a-Lago, while biased outlets called the race a coin toss, my family and close friends used the prediction market Kalshi to know we won hours ahead of the fake news media. I immediately knew I had to contribute to their mission,” Trump Jr. wrote on X.

Leading up to the Nov. 5 election, Kalshi won a court case against the U.S. Commodity Futures Trading Commission, paving the way for legal election betting in the U.S., CNBC reported. Legal sportbooks in the U.S. do not offer election betting.

The commission has continued its efforts to curtail prediction markets.  

According to Koleman Strumpf, an economics professor at Wake Forest University, prediction markets are operating in “a legal gray zone.” 

Strumpf discussed the issue during a video interview on Gambling.com’s “The Edge” in the weeks leading up to the 2024 presidential election. Trump, a former Republican president, defeated Vice President Kamala Harris, a Democrat, in the election. Trump is set to be inaugurated to a second term on Jan. 20.