Kalshi’s weather and climate contracts are pacing toward $1.1 billion in annualised trading volume, a 500% increase year on year, according to figures the exchange published alongside a data and distribution partnership with The Weather Company announced on 27 August 2026.
The agreement runs in both directions. The Weather Company supplies enterprise weather data feeds that Kalshi uses to settle its markets, and Kalshi’s real-time probabilities go the other way, into The Weather Channel app and weather.com. The Weather Company says those properties reach around 330 million people globally.
The distribution side is the commercial development. A regulated US derivatives exchange will show live contract prices inside a mainstream consumer weather app, to an audience that did not arrive looking for a betting product.
What the contracts cover
Kalshi’s weather vertical started with daily temperature and precipitation contracts and has widened into longer-dated climate questions. Current and recent markets include the frequency of climate disasters, the severity of coral die-off events, Lake Mead water levels and the severity of Phoenix heatwaves.
Settlement accuracy is the operational problem in this category, and it is the specific gap the partnership fills. Weather contracts resolve against a measured value at a named station on a named date, so the data source has to be defensible before the market opens, not after a disputed settlement.
Dr James Belanger, Vice President of Meteorology at The Weather Company, framed the arrangement in those terms.
“When weather data is used to verify outcomes in real time, accuracy and trust matter.”
Will Brackett, Head of Partnerships at Kalshi, said the category is one of the exchange’s fastest-growing.
“Weather is one of the fastest-growing and most crucial categories at Kalshi.”
One boundary is worth stating precisely. Wildfire contracts have been offered on Polymarket’s international platform and are barred to US users. Kalshi has not offered them.
The US legal position
The weather push arrives while Kalshi is losing ground in court on a different product line. On 28 August 2026, the United States Court of Appeals for the Ninth Circuit ruled 3-0 that Kalshi’s sports-event contracts are sports betting under state law rather than federally protected swaps, and rejected the Commodity Futures Trading Commission’s (CFTC) claim of exclusive federal jurisdiction. The case concerned Nevada’s enforcement of its gaming laws, with a parallel ruling covering Arizona.
The ruling covers sports-event contracts. It does not address weather or climate markets.
Mike Dreitzer, chair of the Nevada Gaming Control Board, said the decision confirmed the state’s position.
“This completely vindicates what we have been saying all along. This is sports betting and needs to be properly regulated by the state.”
The decision contradicts an earlier Third Circuit ruling that went Kalshi’s way in New Jersey. CFTC spokesman Zach Fulton told the New York Times that the split now needs resolving above the appellate level.
“The Ninth Circuit has now teed up a circuit split that calls out for resolution by the Supreme Court.”
Appeals remain pending in the Second, Fourth, Sixth and Seventh Circuits. Kalshi faces a geofencing compliance deadline in Nevada, a lawsuit in Connecticut over its sports contracts, and a Michigan ruling that blocked its participation there.
European regulators have already drawn lines
European authorities have not waited for the US position to settle. Spain’s regulator blocked both Kalshi and Polymarket in a licensing crackdown in May 2026, on the basis that the platforms were offering gambling products without a Spanish licence. The Netherlands, Brazil and others have taken comparable enforcement action against prediction market operators.
Malta has taken the opposite approach and opened work on what would be the first EU licensing framework for prediction markets, which would give the category a regulated route into the bloc rather than a blocked one.
The European enforcement to date has focused on sports and event contracts. No EU regulator has ruled specifically on whether a weather contract settled against a meteorological reading falls inside its gambling definition, which is the question the Weather Company distribution deal makes commercially relevant.
Scientists object to the category
The expansion into climate contracts has drawn criticism from climate researchers. Kaitlyn Trudeau, a climate scientist at Climate Central, objected to the framing of climate events as tradeable outcomes.
“The dehumanization of these events really concerns me.”
Michael Mann, a climate scientist at the University of Pennsylvania, and Jamie Pietruska, an economic historian at Rutgers University, have raised related concerns about markets built on disaster severity. Kalshi has argued that its markets aggregate forecasting information and are close to impossible to trade on inside knowledge, since no participant controls the weather.
What happens next
The CFTC has asked for Supreme Court review of the sports-contract question, and the outcome will set whether US states can apply gambling law to exchange-traded event contracts generally or only to sports. For European operators, the more immediate question is narrower: whether the growth of a $1.1 billion weather vertical distributed through a consumer app prompts regulators in Spain, the Netherlands and Malta to treat weather contracts separately from the sports products they have already moved against. The competitive pressure prediction markets place on licensed sportsbooks has so far been argued on sports. Weather is the first category where the exchanges have a mainstream distribution channel that licensed operators cannot match.
Source: Kalshi
