You Can Bet On Climate Disasters. Business Is Booming.

Will Iran's main oil terminal get bombed this month? Will climate activist Greta Thunberg be arrested before July? Will the U.S. get pummeled by a Category 5 hurricane this year?

You can place bets on all of those questions through online prediction markets.

The emergence of markets related to the world's failure to limit climate change illustrates the vast reach of Kalshi and Polymarket, the world's largest prediction platforms. Last year, $239 million was traded on Kalshi's climate markets — the fifth-most of any prediction category, according to data provided by the company. The volume of trading on its climate markets is on pace to grow to more than $1.2 billion in 2026.

The companies, supporters say, can bring the unfiltered wisdom of crowds to climate debates, cutting through the partisan noise around an issue that has divided the country.

But critics argue they have turned one of humanity's most intractable challenges into just another digital horse race for gamblers. Roughly $10 billion is wagered monthly on prediction markets for hundreds of future events, including the impacts of climate change, Citizens Bank told clients in a December report on the industry.

"People enjoy the gaming aspects of them," said Timothy Massad, who chaired the Commodity Futures Trading Commission under former President Barack Obama. "I don't know that it signifies something cosmic about climate change."

Kalshi says prediction markets add to public knowledge and are unbiased because participants have money on the line. The privately held company is worth around $11.2 billion and is backed by major venture capital firms like Andreessen Horowitz and Sequoia Capital, data compiled by the financial service PitchBook shows.

"When new information surfaces, through the media, polling, scientific literature, or anywhere else, prediction markets incentivize people to determine the validity of that information and price its impact accordingly," Kalshi spokesperson Jack Such wrote in an email. "For complex and important topics such as climate science, the importance of these markets only grows."

Polymarket didn't respond to requests for comment. The cryptocurrency-based platform has a valuation of about $10.8 billion and has received investments from conservative billionaire Peter Thiel and Donald Trump Jr.'s 1789 Capital, according to PitchBook. Trump Jr. is an adviser to both Polymarket and Kalshi.

Climate-related prediction markets account for a small portion of the emerging industry, which is currently driven by sports betting fees, Citizens analysts found. Prediction platforms differ from online sportsbooks or traditional casinos, where the house — rather than fellow traders — sets the odds for each bet.

Prediction markets allow traders to buy and sell contracts from each other regarding specific, time-limited questions, such as whether the Canadian carbon tax will be repealed before 2027. The platforms earn fees on the transactions.

The chance of the Canadian tax being reversed fell to single-digit percentage points on Kalshi last May, after Prime Minister Mark Carney's government rolled back the carbon fee for consumers but left it in place for large corporations. A trader who still believes Canada will scrap the whole tax on Friday could now bid $100 for a chance at $1,429 if Carney changes his mind before the end of December.

The Kalshi spokesperson, Such, said markets like these allow companies currently paying carbon taxes to hedge against a potential repeal and help people "know and track the likelihood of this occurring."

The proliferation of climate-related prediction markets comes amid a simmering jurisdictional battle between the Trump administration and state regulators. Commodity Futures Trading Commission Chair Michael Selig asserted last month that his agency has the sole authority to oversee U.S. prediction platforms.

"They provide useful functions for society," he said in a video posted on X, arguing that they are "an important check on our news media and our information streams."

Utah, Nevada, New Jersey and other states are seeking to rein in the platforms, which they claim circumvent state gambling restrictions.

"States have a very legitimate claim that a lot of these contracts constitute gaming," said Massad, who is now a research fellow at Harvard University's John F. Kennedy School of Government.

The CFTC didn't respond to a request for comment.

Ethical questions

Kalshi was created in 2019 by Tarek Mansour and Luana Lopes Lara, who had both graduated from the Massachusetts Institute of Technology the year before. Shayne Coplan founded Polymarket in 2020, after dropping out of New York University.

Before President Donald Trump returned to office last year, the companies were dogged by federal regulatory challenges.

Kalshi sued the CFTC in 2023 to win approval for its election markets. Meanwhile, Coplan's apartment was raided by the FBI in 2024 as part of an investigation into whether Polymarket had violated a CFTC settlement that barred it from accepting wagers from U.S.-based traders. Trump's Justice Department abandoned the probe last July.

Yet the companies continue to face ethical questions about certain prediction markets, due to the potential for insider trading and market manipulation. For instance, earlier this year an OpenAI employee was fired and Israel arrested an army reservist in February for allegedly using nonpublic information to make winning bets on prediction market platforms.

Kalshi prohibits insider trading and has banned a California politician from its platform for betting on his own election.

But Polymarket, where over $39,000 has been wagered on Thunberg's potential arrest, doesn't have any rules that would prevent Thunberg herself from buying "yes" contracts and then illegally shutting down an oil pipeline — a theoretical scenario that, if she were put in a cell, would also put her in the money.

As of Friday evening, traders on the platform believed there was a 59 percent chance that Thunberg would be detained by law enforcement by June 30. She didn't respond to a request for comment.

Polymarket traders can also use cryptocurrency to bet on whether the U.S. mainland will be hit by a Category 5 hurricane in 2026 or whether Iran's Kharg Island oil terminal — the gateway for 90 percent of the country’s crude exports — will be bombed before April. The Trump administration executed air strikes last week on Kharg Island but spared its oil terminal. The odds on Friday of the hurricane hit and oil terminal bombing were 16 percent and 29 percent, respectively.

The Kharg Island market includes a note explaining why the platform allows betting on an active war that has killed thousands of people across the Middle East and caused a global spike in the price of oil, gas and other goods.

"After discussing with those directly affected by the attacks, who had dozens of questions, we realized that prediction markets could give them the answers they needed in ways TV news and X could not," the Polymarket note says.

Polymarket has a dedicated climate and science section, which includes the hurricane market. But not all of its climate-related markets are listed there. The Thunberg market is listed under its Gaza category, since she has also protested Israeli attacks in the Gaza Strip, and the Kharg Island market is listed in the Iran section.

Kalshi also has a climate category. Markets there allow traders to bet on whether the U.S., EU and India will hit their climate goals or whether the global temperatures will exceed 2 degrees Celsius of warming from pre-industrial levels by midcentury. The Canadian carbon tax market is in Kalshi's international section.

A $3 billion industry

Polymarket, Kalshi and other prediction platforms are on track to generate roughly $3 billion in revenue this year and could bring in $10 billion by 2030, Citizens Bank said in a report last month.

"We can envision a revenue pool much larger over the longer term as capital scales and more revenue streams develop," the report said.

Other companies are racing to cash in on the betting bonanza, including the Trump Media and Technology Group, where Trump Jr. is a board member. Trump Media, the parent company of Truth Social, said last October that it would offer a Truth Predict platform where users could bet on elections, oil price changes, sports and other events. It’s unclear when the platform will be launched.

FanDuel, the nation's largest sportsbook, launched a predictions platform in January.

Trump Jr.'s ties to Kalshi, Polymarket and Trump Media have led some observers to question whether the Trump administration would provide adequate oversight of the industry. He joined Kalshi as a strategic adviser in January 2025, days before his father was sworn in for a second time, and took on a similar role at Polymarket in August after the company reached a settlement with the CFTC allowing it to legally operate in the United States.

"It appears that the Trump family has a significant economic interest in prediction markets, and I am concerned that that is influencing the regulation of these markets," said Harvard's Massad.

Andrew Surabian, a spokesperson for Trump Jr., said the president's son "doesn’t interface with the federal government as part of his role with any company that he invests in or advises." Trump Jr. also does not engage in any trading "on any prediction market platform," Surabian added.

Davis Ingle, a White House spokesperson, said “the only special interest guiding the Trump Administration’s decision-making is the best interest of the American people.”

Trump Media didn't respond to requests for comment.

Climate betting benefits

Prediction markets companies have promoted the financial and informational value of climate-related trading.

"While everyone fights over politics and sports, this guy is farming probability from climate datasets," said the prediction analytics firm Polycool in an X post that highlighted an anonymous trader who had netted over $9,600 from climate and temperature bets in less than two years.

"Are climate markets the most ignored edge on Polymarket right now, or is everyone just sleeping on the data?" the January post said.

Kalshi’s co-founder and CEO, Mansour, has previously argued that prediction markets could help settle disputes about climate science.

"Imagine a world where — if we’re debating on whether climate change is real, and you’re screaming, ‘No, it’s absolutely not real!’ and I’m screaming, ‘Climate change is 100 percent real. You’re full of shit!’ — there’s a market where people have real money on the line saying that there’s a 70 percent chance that next year is going to be hotter than this year," Mansour told Vanity Fair last month.

Kalshi is an "objective, unbiased, filtered source of truth for what the future holds," he said.

Mansour's comments to the magazine were intended to illustrate how prediction markets can "provide accurate information on any politicized event, and was just picking the climate crisis as an example," wrote Such, the Kalshi spokesperson. "He wasn't making any specific remarks on the quality of climate science."

There is already overwhelming scientific agreement that the Earth is warming, primarily due to the burning of oil, gas and coal.

Timothy Cama contributed to this report.