A lot of people may be placing bets Sunday — on Philly’s temperatures
More than $5 million has been wagered on Philly’s daily high temperatures during the last three months.
On the day that the Philadelphia Eagles play for the right to go to the Super Bowl, some bettors are going to win — or lose — some cold cash.
And not necessarily on the outcome of the game — but on Sunday’s high temperature.
À la traditional sports betting, the maverick commodity trading company Kalshi Inc., is letting people bet on daily temperatures in several major cities, including Philadelphia, and on other weather and climate elements, such as January snow in New York City, the January global temperature, Arctic ice extent, and tornado incidence.
It’s part of a burgeoning national fascination — some would argue compulsion — for betting on almost anything, said John Holden, an Indiana University professor of business law and ethics and gambling-industry expert. The nation just elected a president who is a former casino baron.
Online betting has raised concerns in New Jersey over gambling-addiction issues, not to mention its impacts on Atlantic City casinos, but the wagering wave has been cresting.
“There’s a growing interest in wagering since we’ve had this widespread legalization across the country,” said Holden. Besides sports, a natural question, he said, has been “what else is there?”
One answer evidently is the atmosphere.
Weather-related commodity trading — buying agricultural goods for future delivery at current prices — dates back centuries. But Kalshi has ventured into betting on the actual weather. Holden said that no states allow the likes of DraftKings to offer wagering on weather variables, lest they run afoul of federal regulators.
Kalshi and other trading outfits, however, play on a different ball field because they are federally regulated and have been able to make their wares available across the country. Holden said that he knew of no other trading houses that were offering a sports-book model for betting on weather.
The risk-takers evidently are taking to it.
“It’s been growing a lot,” said Kalshi official Jack Such. And the company’s swelling traffic likely got a boost on Thursday when it announced it was getting into Super Bowl wagers. (The Eagles are an overwhelming betting favorite to get there, by the way.)
Since Nov. 20, people have wagered more than $5.3 million in “trading volume,” on the career of daily temperatures at Philadelphia International Airport, a relatively new offering to the weather menu.
The Philadelphia trading happened to begin two weeks after a national election that has turned out be a major victory for its weather-betting and other business, said Such.
How do people go about placing bets on the weather?
Kalshi operates a so-called prediction market, which in essence is a form of financial crowdsourcing.
Starting at 5 a.m. Philadelphia time each day, bettors are offered yes-no options on the probabilities of the high reaching certain temperatures. Those probabilities undergo changes throughout the day.
Kalshi describes the probabilities as being “market-assigned,” with the bettors driving the shifts in the odds.
The calculations can get rather wonky, but in simple terms, the more improbable an outcome, the bigger the payout for those willing to gamble on the unlikely.
For example, at 9 a.m. Friday, the probability of a high of 31 to 32 degrees that day was listed at 47%. If you chose “no” and the thermometer cooperated, the payoff was $165 for a $100 wager. But by 9:20, the probability fell to 25%, and a “no” would yield $133.
For all the temperature options across the country, the outcomes are based on what happens at official National Weather Service stations, such as the one at the airport. But thermometer there is subject to microclimate effects: It is located in a meadow not far from runways, the Delaware River, and a swamp.
The temperatures are reported in whole numbers; a 32.4 is 32, a 32.6 is 33.
One also can bet on January snow at New York’s official station in Central Park. So far this month, only 3.0 inches have fallen there — sound familiar? — and bettors evidently are buying into what computer models are saying.
The Kalshi probability of New York reaching 5 inches by the end of January is a paltry 8%. A $100 on wager on “yes” would yield $804.01.
Gamblers may be inclined to bug weather service offices for updates, and meteorologists say that has happened, but agency’s official policy is thank you for not bothering us.
The weather service “does not provide tailored advice or information for weather gambling,” said spokesperson Susan Buchanan. “Our forecasts are standard and publicly available to everyone.” Also, offices around the country post daily climate reports on their websites.
How does Kalshi decide what weather betting options to offer?
Kalshi’s website boasts: “Bet on anything.”
According to Such, a Kalshi “market team figures out what people are interested in knowing about.” He said the company also takes suggestions from the public, which appears to have quite an eclectic appetite.
The Kalshi non-weather choices range from will Elon Musk win his AI lawsuit, to who will win the Oscars, to who is going to win the NFC championship game — bettors strongly favor the Eagles — to who will win the Romanian presidential election this year.
Kalshi was a big winner in the November election campaign
Such said the U.S. presidential election was a game-changer for the New York-based Kalshi, founded in 2018 by two former Massachusetts Institute of Technology students, Tarek Mansour and Luana Lopes Lara.
Over the objections of the Commodity Futures Trading Commission, the company won a federal appeals court order in October that allowed it to accept bets on the outcome during the campaign, generating over $100 million in wagering.
The activity also was a boon to its other options, including weather, said Such.
The regulatory commission, which had argued unsuccessfully that permitting such gambling would pose a threat to the integrity of the election process, already has undergone significant changes in early days of President Donald Trump’s administration.
Trump appointed a new commission chair, Republican Caroline D. Pham.
And Kalshi has added a new strategic adviser — Donald Trump Jr.
In April, Kalshi became affiliated with the global trading giant Bala Cynwyd-based Susquehanna International Group, whose founder, Jeff Yass, is believed to be the wealthiest person in Pennsylvania and a major Republican donor.
About that airport temperature
It’s probably a good bet that Kalshi will be staying in the election, sports, and weather wagering business for the foreseeable future.
Regarding the weather, Friday provided a cautionary note for bettors. If you went with the “yes” option for the 31 or 32 outcome during the morning, you were out $100 by noon. It was 31 degrees at Mount Holly and 32 in West Chester. But it jumped to 33 at the airport, the only station that mattered.
Staff writer Joseph N. DiStefano contributed to this article.