Prediction markets have found a growth category that does not depend on sports seasons or election cycles: the weather, and the climate itself. Kalshi announced a deal giving it access to data from the Weather Company — owner of the Weather Channel — to verify weather-related outcomes, and called weather “one of the fastest-growing and most crucial categories” on the platform. Monetized weather and climate predictions grew 500% over the past year into a $1.1bn market, and Kalshi’s markets will appear inside the Weather Channel’s app, which the company says reaches more than 330 million people worldwide.
The ambition is stated openly. Kalshi co-founder Tarek Mansour: “The long-term vision is to financialize everything and create a tradable asset out of any difference of opinion.”
What is tradable now includes the daily high temperature in New Orleans, whether the US breaks its record for billion-dollar weather disasters this year, whether the world avoids catastrophic heating, the severity of coral bleaching in Hawaii, and how far Lake Mead falls below its record low. Polymarket’s international platform still lists wildfire markets — US users are barred from them — after $1.2m was staked there on the extent of the Los Angeles fires last year. One user’s comment on that market: “volume so high in this market it cause another fire.”
Kalshi says it has never offered wildfire markets, citing “perverse incentives.” It does offer markets on the severity of heatwaves in Phoenix, where up to 500 deaths in Maricopa County are being investigated as possibly heat-related; excessive heat is the deadliest category of extreme weather in the US.
The objection from scientists is not that the markets are rigged but that they convert suffering into a ticker. Kaitlyn Trudeau, a climate scientist at Climate Central, lost her grandfather’s home in the Eaton fire, which killed at least 19 people. “It left a bad taste in my mouth imagining people making money off it,” she said. “The dehumanization of these events really concerns me. I worry about the gamification of this because it distances us from the impacts of climate change, it affects our empathy.” She also questioned the calibration claim that Kalshi offers in defense of its markets: “Since calibration is measured by comparing many predictions against many realized outcomes, how can a market be calibrated on impacts that, by definition, haven’t happened yet?”
Michael Mann, at the University of Pennsylvania, pointed to the incentive structure: the bets create “all of the perverse incentives this can create, especially among bad actors with malicious intentions,” including fuel for the idea that weather is being manipulated. Jamie Pietruska, an economic historian at Rutgers, framed the push as partly reputational: “They have to convince the courts they aren’t a gambling platform for sports and crypto. The weather and climate are seemingly innocuous in comparison.” Listing climate disasters beside the timing of Taylor Swift’s next album or the next Super Bowl “casualizes and trivializes catastrophe and human suffering,” she said. “The wisdom of crowds isn’t going to encourage the community building and solidarity we need to address the climate crisis.”
Kalshi, Polymarket, and the Weather Company all rejected the idea of improper practice. The Weather Company said it views weather data “through the lens of decision intelligence and risk management – not gamification”; Polymarket said that “when tragedy unfolds, people turn to the news for commentary and they come to Polymarket for information.”
The legal ground is shifting underneath all of it. Last week a federal appeals court ruled that states may regulate prediction markets as gambling, in a case brought by Nevada after it tried to shut Kalshi down; senators have pressed the CFTC over wildfire bets. Pietruska’s summary of the stakes is the one to hold onto: “If I go online and see the perception that the world will pass 2C warming by 2050, it creates a sense of a predetermined future, even though this is an aggregation of public opinion. It’s not a truth machine.”