Medical experts are concerned about gambling “prediction market” company Kalshi’s decision to let people wager on the approval of medical treatments.
“Prediction market” companies like Kalshi and Polymarket exploit loopholes in state and federal law to bring casino-style gambling to anyone with a smartphone. While traditional gambling operates under state oversight and state law, prediction market platforms claim protection under federal commodities laws, letting people wager hundreds of millions of dollars on sports, elections, and other events without being accountable to state regulators. Some of these companies have been accused of using deceptive videos and fake wins to appeal to young people on social media. Others have been taken to court for refusing to abide by state gambling and consumer protection laws.
In July, the online “prediction market” platform Kalshi announced it would host betting on the outcomes of clinical trials and U.S. Food and Drug Administration (FDA) regulatory reviews. A recent column published in the Journal of the American Medical Association (JAMA) is raising serious ethical concerns about what that means for medical research and for patients.
Among other things, authors at JAMA believe the odds that platforms like Kalshi assign to clinical trials could affect whether people pursue experimental treatments, writing:
“The effects on trial participants touch the ethical core of the relationship between investigator and participant. Low public odds of success could discourage continued participation in trials that already carries high participant burden, increasing dropout and reducing statistical power. High public odds could have the opposite effect: participants who do not perceive the benefit predicted by optimistic markets may conclude they are in the placebo group and discontinue follow-up. When they enroll, participants accept trial-related risk in exchange for the resulting data’s validity and value to society. Trial participation is fundamentally altruistic, and public markets that negatively impact retention and reporting, and therefore validity, ultimately subvert that altruism.”
The authors also note that Kalshi does not do enough to prevent people from unjustly enriching themselves through “prediction market” wagers on medical trials:
“In securities markets, insider-trading restrictions prevent individuals with access to material nonpublic information from unfairly profiting from that access. Strict controls limit access to information that could impact a company’s share price, trading is tightly regulated and monitored, and trades by corporate officers with potential material information are publicly disclosed. No such framework exists for clinical trials prediction markets. Kalshi’s proposed safeguards are inadequate to guard against these possibilities, and are the regulatory equivalent of corporations setting their own rules against insider trading.”
To put it another way, how would you feel if you knew someone on your medical team was secretly wagering on Kalshi that your medical treatments would not work?
This is simply another example of how deeply troubling prediction markets can be. As powerful corporations try to make gambling part of everyday life, it’s important for Arkansas to protect its citizens and families from predatory gambling. Otherwise gambling will simply continue wrecking lives and hurting families in our state.
Articles appearing on this website are written with the aid of Family Council’s researchers and writers.
