Temperature check: alarm as prediction markets lean into weather and climate bets

Online prediction markets, previously dominated by sports, cryptocurrency and political betting, are now focusing on the climate crisis and weather forecasts, according to alarmist warnings from climate experts. These gamified predictions on potential disasters, such as heatwaves, daily temperatures, and catastrophic events, have gained momentum thanks to a new deal between Kalshi, a prominent online financial exchange, and the Weather Company.

The Weather Company, owner of the Weather Channel, will provide data to Kalshi to verify weather-related betting outcomes, making weather one of the fastest-growing and most crucial categories on their platform. The market for weather and climate predictions has expanded 500% in the past year, reaching a value of $1.1 billion. Kalshi's co-founder, Tarek Mansour, claims that this gauge of public opinion can not only serve as a financial hedge for businesses facing extreme weather but also help shape weather forecasts.

The Weather Channel's app, used by over 330 million people worldwide, will display Kalshi's betting markets. Users can wager on various weather predictions, including daily temperatures in specific locations, the number of climate-fueled disasters in the US, whether the world will avoid catastrophic global heating, and the severity of coral die-off in Hawaii.

One can even bet on how much Lake Mead, the largest US reservoir, will drop below its already-low levels. Although Polymarket, Kalshi's main rival, still offers wildfire markets, US consumers are currently barred from accessing them. However, these online markets have raised concerns among scientists and climate advocates, as they believe that turning tragic consequences of climate change into an online money-making venture can dehumanize the issue, reduce empathy, and distract from the need to address climate change.