People are willing to bet on just about anything. And yes, that includes the weather. If you know where to look, you can place real money bets on the weather. It may sound a little crazy and completely superficial, but there are actually some pretty interesting things to know about weather betting.
Let’s start with the basics. First of all, not all betting sites offer weather betting. You have to know where to look. Online weather betting is a very niche type of wagering, so only a few sites have semi-frequent weather bets. You will need to keep your eyes open and check back with the main sportsbooks frequently for actual bets on the weather.
So what’s weather betting all about anyways?
A lot of the time, weather betting sites offer wagers on things such as temperatures, rain, snow and storms. One of the most common bets you’ll see in this category are wagers on temperature extremes. During the summer months, you’ll often see bets based on the highest temperature of the year.
For example, Betfair had a high temperature wager this last summer. Betfair had several contracts available in which you could bet that the highest temperature would be 85 or lower, 85.01 to 90, 90.01 to 94 and so on. Your goal in this bet would have been to accurately predict the general range of the highest recorded temperature that summer.
Betting sites also host similar wagers during the winter, except for the lowest temperature. You may also find wagers based on the number of hurricanes that make landfall in certain regions, the month that will have the highest or lowest temperature, the month that will accumulate the most rainfall and so on.
Weather bets come in all different formats but they are all fairly self-explanatory. If you visit a website that offers weather bets, you’ll see a list of what they have open at that moment. The basic idea in all of these bets is to predict the weather in advance.
Why do people bet on the weather?
This is where it gets interesting. Some people simply bet on the weather for fun. If you think you have a great intuition for the weather, you can put yourself to the test and hopefully win a little money. You can look at this form of betting as something to do for fun, or you can take it seriously like they do in Cambodia.
Other people approach weather betting for completely different reasons. More specifically, there are people and groups of people who bet on the weather as a hedge.
Imagine that you’re a farmer and you need a fairly cool, moderate summer for your crops to do well and earn you money. It is understandable that you might be a little concerned about high temperatures this year. In this case, you may consider taking out a couple of big bets on the temperatures being higher than normal.
In this case, you would be hedging against your crops doing poorly. If the weather stays cool and moderate, you’re happy because your crops do well and you make a good living. If the weather gets hot and kills off some of your crops, you’ll be upset about that but at least you’ll have a little income coming in from your winning weather bets.
That is just one example of how weather betting can be put to use in the real world. If you have any business that relies at all on the weather, you can hedge yourself against losses. Your weather bets may end up costing you some money if they fall through, but the purpose of hedging isn’t to become rich. It’s just to avoid financial ruin.
In fact, some of the world’s largest financial companies are also involved in their own weather betting in the form of futures contracts. Enron started taking weather bets back in the early 2000s and it has since turned into its own industry. Farming corporations, utilities companies and entire cities have taken out contracts on the weather in order to hedge themselves against various risks.
Mental Floss has an interesting article about weather futures here. Those examples are a little more extreme than what you will probably experience online, but it goes to show that not all weather betting is gratuitous gambling.