Kalshi, a leading prediction market platform, has expanded its offerings to include bets on drug trial results and is exploring contracts on flight delays, as such platforms gain popularity and offer wagers on virtually any event.
New Markets for Clinical Trials and FDA Decisions
The company said the expansion into clinical trials and U.S. Food and Drug Administration (FDA) regulatory decisions will help surface information on drug trials that often goes unreported. A publicly listed contract on a drug trial would produce a “continuously updated, public probability that reflects the weight of the evidence, rather than the preferred message of the trial sponsor,” according to Kalshi.
“Drug development is one of the most important and most information-constrained industries on earth,” said Kalshi CEO Tarek Mansour in a statement. “The data that determines which drugs advance and which don’t is largely locked away from the people who need it most. Surfacing information is what Kalshi is for, and we are committed to doing it right: compliance-first, carefully scoped, and built for the long term.”
The launch is a pilot program announced in partnership with artificial intelligence firm AppliedXL.
Regulatory and Insider Trading Concerns
Critics have warned that prediction platforms like Kalshi are vulnerable to market manipulation and insider trading. Federal regulators told CBS News that Donald Trump’s longtime teleprompter operator made tens of thousands of dollars on bets around the president’s speeches. Last month, the Department of Justice investigated former Republican congressman George Santos over potential insider trading by betting on his own attendance at the State of the Union address. In April, several congressional candidates were fined for betting on their own races.
To mitigate risks, Kalshi said it will require employment verification to prevent insider trading, as it does with other markets. It will only list contracts after enrollment in a drug trial closes, to avoid interfering with recruitment or physician referrals.
White Paper and Industry Support
Kalshi released a 44-page white paper on the “state and future” of drug development prediction markets, featuring quotes from healthcare leaders, including 23andMe founder Anne Wojcicki. “Most patients don’t know about the choices available in clinical trials or which programs are most promising,” Wojcicki wrote. “The opportunity to have an open, transparent dataset about trial probabilities is extremely promising and empowering for people.”
Flight Delay Contracts and Market Growth
Kalshi also filed a notice with the U.S. Commodity Futures Trading Commission (CFTC) on Tuesday certifying contracts on the percentage of flights cancelled at a specific airport over a given timeframe, based on data from FlightAware and the U.S. Department of Transportation. The filing stated the contract would initially be listed after close-of-business on 14 July, though Kalshi said it is not yet live and is still evaluating the market, which “has utility in hedging travel related risk.”
Kalshi has dominated online prediction markets, reaching $1 billion in trading volume earlier this year on Super Bowl Sunday. It averages over 5 million monthly users, a large share of whom are young men. Despite emphasizing it is not a gambling platform, experts say prediction markets are just as addictive, and U.S. regulators are not doing enough to keep users safe. Kalshi recently announced it would give $2 million to the National Council on Problem Gambling for “trader health and safety.”
