Kalshi offers Stowe businesses a snowfall hedge for a slow ski-season start

Kalshi has begun marketing a snowfall contract tied to Stowe Mountain Resort as a way for inns, restaurants and vacation-rental operators to cushion a poor opening to the ski season. The market settles on the amount of snow the resort records by Dec. 24, a period preceding the Christmas and New Year holidays, two of Stowe’s busiest weeks.

Compass Vermont reported that the federally regulated exchange had three main Stowe lines listed as of Oct. 23. Each contract pays $1 if its specified outcome occurs and nothing otherwise, while its price in cents broadly reflects traders’ assessment of the odds.

Businesses seeking protection against weak early bookings can buy “No” contracts, which pay if snowfall is at or below a stated threshold by Christmas Eve. The 45-inch contract cost 35 cents, the 55-inch contract 51 cents and the 65-inch contract 65 cents.

At the 55-inch line, a business would spend about $5,100, before trading fees, for contracts that could return $10,000. A slow start would leave it with a net gain of about $4,900; a result that does not settle in its favor would mean losing the stake. Kalshi has described such trades as “a cheap risk management tool.”

The market is designed to track a vulnerability that extends beyond the mountain. During Stowe’s thin-snow 2015-16 winter, skier and rider visits fell 18% to 20% for the season even though snowmaking kept dozens of trails open from top to bottom. Fewer resort visitors also mean fewer customers for businesses along Mountain Road.

Historical OnTheSnow records show about 20 inches of Stowe snowfall in November and 45 inches in December, making the 55-inch line roughly a coin-flip market. Kalshi has pointed to Adam Farr of Ascend Properties, a vacation-rental manager who bought a comparable Big Sky contract, as its model: a slow season triggers a payout that can offset lost bookings, while a snowier start means the hedge expires worthless.

The contracts do not remove every weather-related business risk. Vail Resorts, which owns Stowe, has said it will not actively hedge snowfall through prediction markets. Its chief executive, Rob Katz, told Semafor that the timing of snow and temperatures before and after a storm matter as much as cumulative snowfall, making a clean hedge difficult. A Stowe business could therefore win a snow bet while snowmaking supports a strong December, or lose one after a major storm if rain subsequently harms conditions.

As we reported in August, Kalshi’s partnership with The Weather Company included plans to explore markets tied to local ski conditions; the weather firm also helps verify outcomes for some contracts. The Stowe market itself settles using the resort’s own snow report.

Kalshi’s weather markets recorded $564 million in trading through July, and the company expected about $1.1 billion for the full year. In September, it filed with federal regulators to list snowfall markets at further resorts, including Snowbasin in Utah and Banff Sunshine Village in Alberta.

The company operates under federal regulation, and no Vermont action against it is on record. A Vermont bill, H.913, that would have prohibited certain prediction-market contracts including election bets, was heard by the House Government Operations and Military Affairs Committee in April but received no further action. Vermont has not joined other states’ litigation against prediction markets, although Attorney General Charity Clark has supported states’ right to regulate them.