Climate Bets Explode Into $1.1 Billion Industry as New York Sues Polymarket

Prediction markets are cashing in on climate anxiety, with Kalshi reporting $1.1 billion in weather wagers while New York takes legal action against rival Polymarket.

· 2 min read ·
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Prediction markets have found a lucrative new frontier: the climate crisis. Platforms like Kalshi and Polymarket are now letting users place online bets on questions such as how hot a city will be tomorrow, how fast ice will melt, and how many costly climate disasters will strike in a given year [250006].

Kalshi reported 500% growth in weather and climate wagers over the past year, reaching $1.1 billion in activity. The company is partnering with the Weather Company, which owns the Weather Channel, to build credibility in this emerging market [250006].

The expansion comes as prediction markets face mounting legal scrutiny. New York filed a lawsuit against Polymarket US, accusing the platform of running an unlicensed gambling operation. The move marks an escalation in the state's legal fight against prediction markets [249019].

Polymarket has separately asked European regulators to treat its bets as financial products, seeking to be regulated as a financial services firm rather than under the current patchwork of gambling laws across Europe [247077].

Kalshi, which is regulated in the United States, has pushed regulators to expand what it can offer. The company formally asked the Commodity Futures Trading Commission (CFTC) to permit margin trading on prediction markets, which would let traders borrow money to open larger positions [247619]. The CFTC has not yet responded publicly to the request [247619].

Kalshi has also taken the unusual step of allowing users to bet on its own legal fate, listing a market on whether its products will be approved by regulators. The company is betting that transparency will help its case as it fights in court for the right to offer certain contracts [248991].

The platform has drawn scrutiny over a flood of nearly identical trades, each worth about $5,500, that swept through a single market and added up to roughly $5 billion in total activity. Kalshi says the trades are normal, but the size and pattern have raised questions from observers [247645].


Sources

Betting on the End of the World: Climate Crisis Becomes New Gambling Trend #250006Kalshi Bets on Itself as Legal Fight Heads to Court #248991Polymarket pushes Europe to classify bets as financial products #247077Kalshi's $5 Billion Mystery: Identical Trades Raise Questions #247645New York sues Polymarket US over illegal gambling claims #249019Kalshi Pushes CFTC to Allow Margin Trading on Prediction Markets #247619

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