Prediction markets dip their toes into shrinking Lake Mead

Prediction market platforms like Kalshi and Polymarket allow users to bet on the likelihood of almost anything, from who will win World Cup soccer matches to how many federal agencies President Donald Trump will cut. New in June was the chance to bet on the fate of the shrinking Lake Mead, a huge reservoir straddling the border between Nevada and Arizona. 

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Lake Mead isn’t just a popular national recreation area for boaters looking for respite from the nearby Las Vegas heat. It’s also the largest reservoir in the United States, and formed by the Hoover Dam, it supplies water to people and agriculture across seven states, tribal lands and northern Mexico. 

And in the face of climate change and drought, it’s drying up — and creating an opportunity for gambling in the process, as Circle of Blue first reported. 

Kalshi users traded over $18,000 in bets on what the end-of-month water elevation at the Hoover Dam in June would look like. Anyone who thought it would be greater than 1,044 feet won some amount of money — as of July 1, the official water level was 1,044.55 feet above sea level. That’s more than 184 feet below what’s considered a “full pool” level of 1,229 feet about sea level.

The Bureau of Reclamation expects the lake will continue shrinking. The agency’s projections estimate the lake could get as low as 1,015 feet by July 2027. 

The reservoir is only at 27% capacity, not boding well for the millions of people who rely on the water it holds. In 2022, NASA said the lake “provides a stark illustration of climate change and a long-term drought that may be the worst in the U.S. West in 12 centuries.”

Drought isn’t the only climate catastrophe gamblers have capitalized on. People also bet on wildfires, raising ethical questions and concerns about incentivizing arson. Polymarket users traded $1.2 million dollars as Pacific Palisades and Altadena burned in fires that killed 31 people and destroyed 16,000 structures in January 2025. Wyldfyre, a new platform, purports to be the first California wildfire-specific prediction market. 

The government is grappling with how to rein in prediction markets, which have already drawn heat for insider trading by politicians, tech sector employees and military insiders. So far, keeping people from betting on natural disasters doesn’t appear to be a priority.