Sponsor
Michael Baumgartner
Representative · R-WA
The bill aims to prevent markets and actors from profiting off wildfires and to strengthen reviews that deter exploitation, but it trades off reduced private hedging options, potential loss of market signals and transparency, and risks of expanded enforcement or compliance burdens.
Homeowners, renters, and wildfire-prone communities will face fewer financial products and markets that profit from or commodify wildfire damage, reducing moral-hazard incentives and perceived exploitation after disasters.
Federal action and review reduce avenues for market manipulation and cross-border wagering tied to wildfires by restricting problematic domestic markets and assessing offshore/digital platforms, improving overall market integrity and national resilience.
The bill affirms and preserves State authority to regulate or prohibit gambling, protecting state control over gaming rules and local decisionmaking about disaster-related wagering.
Homeowners, insurers, reinsurers, and municipalities could lose or see reduced access to market-based hedging tools for wildfire risk, potentially increasing insurance premiums and public fiscal exposure.
State and local governments, and other risk managers could lose market data and price signals from regulated wildfire-linked markets, hampering planning, risk assessment, and resilience investments.
Restrictions may push trading into off-exchange or bespoke contracts abroad or in unregulated venues, reducing transparency and making oversight and enforcement more difficult.
Based on analysis of 4 sections of legislative text.
Bans CFTC-registered entities from listing, clearing, or trading contracts or instruments based on or referencing wildfire events and requires a DOJ review of related legal authorities.
Representative · R-WA
Official title: To amend the Commodity Exchange Act to prohibit wildfire event contracts on prediction markets, and for other purposes.
Introduced August 17, 2026 by Michael Baumgartner · Last progress August 17, 2026
Prohibits federally regulated markets and registered entities from listing, clearing, or trading any contract, agreement, swap, index, or other instrument that is based on or references a wildfire event or measures related to wildfires. It also directs the Attorney General to review criminal and civil authorities related to intentionally causing, exploiting, or profiting from wildfires and to report legislative recommendations to Congress. The bill states Congress’s nonbinding view that betting on wildfires creates perverse incentives, undermines public confidence in emergency response, and can enable exploitation of nonpublic wildfire information, and it preserves state gambling laws.