Kalshi Taps The Weather Company as Prediction Market Volume Soars
Kalshi has partnered with The Weather Company to use its meteorological data to verify outcomes on weather-related prediction markets, as trading volume in the category surges 500% year over year.
The Weather Company, which operates weather.com and the Weather Channel app, will run official observations through its own quality-control system before they settle Kalshi contracts.
That system screens readings against nearby stations and weather model analysis to flag physically implausible values. It also pulls from a network of more than 400K personal weather stations.
In return, The Weather Company plans to embed Kalshi's real-time probability data into select experiences on its app and website, giving users a live look at how markets are pricing weather risk.
Kalshi's weather vertical is tracking toward $1.1B in annualized trading volume. The category hit $564M through July and surpassed its full-year 2025 total back in March.
Why businesses are paying attention
Kalshi is pitching weather markets as a practical hedging tool for companies exposed to weather risk.
Farmers are buying contracts that pay out if heat waves cross certain thresholds. Logistics firms are using them to manage precipitation-related delays. Ice-cream shops are hedging against unseasonably cool summers.
Will Brackett, Kalshi's head of partnerships, pointed to construction crews as a concrete example: if a team is pouring concrete and rain causes a delay, fines and penalties follow.
A liquid weather market, he argued, gives small businesses an easier hedge than traditional derivatives or insurance.
Eric Zitzewitz, an economics professor at Dartmouth who studies prediction markets, said growing short-term weather contracts could build liquidity and interest in longer-term climate markets.
Those markets remain underdeveloped but have been explored by reinsurance-backed researchers tracking risks like cyclone activity and El Niño timing.
Tampering concerns shadow the space
The partnership also arrives against a backdrop of scrutiny. Suspected tampering at a weather station at Paris's Charles de Gaulle airport surfaced earlier this year, coinciding with two large Polymarket payouts of $14K and $21K. The investigation remains ongoing.
Kalshi's deal with The Weather Company is partly a response to that vulnerability. The Weather Company's quality-control layer is designed to screen out manipulated readings before they can affect settlement.
"Our priority is ensuring Kalshi's settlements rest on objective, scientifically validated atmospheric data."
James Belanger, The Weather Company
Critics have raised broader ethical questions about betting on natural disasters, including wildfires and hurricanes.
A group of nine Democratic senators recently wrote to the Commodity Futures Trading Commission flagging concerns about wildfire markets and the risk of arson. Kalshi says it does not allow wildfire betting because it creates perverse incentives.
Weather still trails sports, which has accounted for roughly half of Kalshi's overall trading volume over the past year. But the category's rapid growth and its natural fit with commercial hedging make it one of the platform's more credible long-term bets.