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Kalshi and Polymarket are facing criticism for offering markets tied to clinical trial outcomes and FDA drug approvals, a move that has added a new ethical flashpoint to the fast-growing prediction market sector.
The backlash centers on whether allowing people to bet on high-stakes medical outcomes could distort research, encourage insider trading, or reduce life-and-death decisions to speculation. Kalshi has defended the concept as a potentially useful source of information for drug development, while Polymarket declined to comment in the source report.
Critics say trial betting risks crossing a line
The sharpest criticism in the report came from patients, researchers, and biotech figures who argued clinical trials are not comparable to sports, politics, or other common prediction-market topics.
Boston University humanities professor Joshua Pederson, whose 12-year-old son entered a clinical trial for a novel cancer treatment, said the platforms overlook the human cost behind failed trials. He called the idea of betting against clinical trial success “quite ghastly.”
David Tsai, who started an online petition calling for such markets to be banned, argued they threaten trust in biotechnology. Radiation oncologist Nicholas Zaorsky also warned that clinical trials are different because investigators, coordinators, and sometimes participants may be able to directly influence parts of the outcomes being wagered on.
That concern goes beyond optics. Critics cited the possibility that people with inside knowledge — or direct involvement in a trial — could misuse that position for financial gain.
Kalshi argues the markets could provide useful signals
Kalshi spokesperson Jack Such pushed back by arguing that if policymakers want to ban profiting from failed trials, they would also have to examine the stock market, where short sellers can benefit from biotech setbacks on a much larger scale.
Kalshi also argues its markets may provide information that helps investors and researchers assess drug-development prospects. A white paper sponsored by the company said an open dataset on trial probabilities could be useful for patients trying to understand which programs appear most promising.
The company told the source outlet it is focusing on late-stage clinical trials, where participants have already been selected. Kalshi also said it will not allow markets in which all trial subjects are minors, though the report noted that could change.
What to watch next
The report leaves several open questions, including what safeguards exist to prevent insider trading in biotech markets and whether regulators will respond. For prediction-market users, the dispute is a reminder that expansion into new categories can bring not just new contracts, but new scrutiny over where these platforms should draw the line.
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Source: As reported by Bobby Allyn.
