Kalshi Inc. has entered a partnership with The Weather Company to bolster the data it uses to settle contracts in rapidly growing weather and climate prediction markets.
The prediction platform is seeking to establish market-implied probabilities as another source of weather information, while promoting the contracts as a tool for companies to manage risk. Under the deal announced Thursday, The Weather Company also plans to add Kalshi’s real-time weather probabilities for some users of its weather.com website and mobile app.
Weather betting has boomed on prediction markets like Kalshi and Polymarket, where individual traders and meteorological experts put money behind predictions for temperatures, rainfall or snowfall in particular areas on specific dates.
But suspected tampering earlier this year at a weather station at Paris’s Charles de Gaulle airport highlighted both the vulnerability of such contracts and their reliance on official measurements to determine winners and losers. That case has been referred to police and prosecutors, but the investigation is still ongoing, according to government forecaster Météo-France.
The role of prediction markets more widely is hotly debated, with concerns about glorified gambling, manipulation and insider trading weighed against claims that they create economic and social value by providing better information about what is likely to happen.
“Helping people understand what we collectively think about what’s going to happen when it comes to weather is another valuable added signal,” said Will Brackett, Kalshi’s head of partnerships.
Weather remains small compared with other trading categories that have fueled Kalshi’s rapid expansion, like sports, which has accounted for roughly half the trading volume over the past year, according to data analyzed by DeFi Rate.
Still, Kalshi’s weather and climate contracts have grown quickly. Trading volume across the category has jumped 500% so far this year, from a year earlier, and is tracking toward $1.1 billion on an annualized basis, according to the company.
Kalshi sees a path for weather to follow a broader trend on the platform. Markets that might initially attract participants making trades on the amount of snowfall in New York City or the temperature in Los Angeles can generate enough volume and useful pricing data to draw businesses and institutional investors.
Farmers are using Kalshi to buy hedges that pay out if heat waves meet certain thresholds to cover agricultural losses, the company said. Small businesses say the platform is an easier way to offset weather risks than traditional options like derivatives and insurance, according to Brackett.