Gamblers now have a chance to put their money where the water isn’t.
Kalshi, an online prediction market, is offering wagers on Lake Mead’s water level at the end of June.
Prediction markets like Kalshi and its competitor Polymarket allow users to bet on the outcome of events – things like elections, interest rate decisions, the winning couple on Love Island, and even whether the U.S. government will confirm the existence of aliens.
Kalshi offers several climate and environment wagers. Most are related to daily temperature readings or rainfall totals. Compared to the political stuff, these are small markets with few transactions.
The Lake Mead market, also thinly traded, is the only water-specific bet on the platform. (Kalshi did not respond to questions about why it started the Lake Mead market.)
With just a few days left in June, the betting odds suggest that Lake Mead will end the month between 1,044 ft. and 1,044.5 ft.
Mead’s water level matters for more than gamblers. The country’s largest reservoir by capacity is a bellwether for the health of the entire Colorado River system. After a winter of record heat and scant snow, the system is teetering, endangering water supplies for cities, farms, high-tech industries, and ecosystems.
As of June 27, Mead sits at 1,044.9 ft, less than 5 ft. above its record low of 1,040.6, set in July 2022. The lake is just 28 percent full.
The next elevation to watch is 1,035 ft., a mark that could be breached later this year. Below that point hydropower generation at Hoover Dam will drop by 70 percent. The steep decline is because 12 of the dam’s 17 turbines are not designed to operate at low water levels and could be damaged if they continue to run.
The Bureau of Reclamation, which manages the dam, recently was authorized to spend $52 million on Hoover infrastructure upgrades.
On June 10, the agency issued a request for proposals to replace two existing turbines with “wide-head” designs that will function down to water-level elevation 950 ft.
More solicitation packages could be forthcoming, according to Becki Bryant, a Reclamation spokesperson. Reclamation initially announced that the $52 million would provide for “up to three” wide-head turbines.
“There are several different turbine designs so upgrades must be tailored to the specific characteristics of each turbine type,” Bryant wrote in an email. “The development of future [requests for proposals] incorporating the different design types is ongoing.”
The winning bidder will have two years to deliver.
All the while, Mead will likely shrivel. Reclamation’s June projections indicate that Mead could drop to 1,015 ft. by July 2027.
The new turbines are not necessarily a bet that Mead continues to plunge. But, for power generation, they are a hedge against the high probability that it does.
