I have concerns regarding insider trading (as I certainly do regarding the stock market), but Kalshi's statement seems straightforward: "If you want to ban profiting from the failure of clinical trials, you would start with the stock market, where the financial incentive for this type of profit is orders of magnitude larger,"

I remember a time not too long ago when storm insurance was unavailable for large portions of the Gulf states. Horrible horrible people, betting on where hurricanes would make landfall, just horrible. /s

Explain to me like I'm 10 years old: what's the difference between a mutual insurance company and people betting on an outcome?

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quantified 10 hours ago | parent | next [-]

For a mutual insurance company, everyone is betting that it's going to happen somewhere sometime, that's why they pay the premiums. There is also not "winning" and "losing", there is no particular event like a known game, and you only get paid to cover a loss. You could squint and say it's taking 100:1 odds (or whatever your coverage-to-premium ratio is), but you have the incentive to play since if an event happens TO YOU, you really LOSE, and if you don't take a bet you just don't take the bet.

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m3047 7 hours ago | parent [-]

We're not talking about sports here. If someone is a possible candidate for a clinical trial, there are probably other treatment options, maybe not preferable.

I could buy "cancer insurance" if somebody sells such a thing. I probably couldn't buy policies which paid out (to me) for random strangers. But I could probably buy it for relatives (still pays out to me). Employers could probably buy it for (key) employees (paying out to the employer). In case your unstated objection is profiting off of the misfortune of strangers. However depending on the risk being mitigated, I could see placing individual bets on a large number of strangers.

If your objection is betting on something with no intrinsic value, well for starters there are probably some bored apes out there but I digress. People take options on the stock & commodities markets. In stock and commodity markets there are real goods which typically have a "long tail" and all the value doesn't typically evaporate over night. But it can happen.

If your objection is people paying different amounts in a betting pool for e.g. hurricane protection, nothing says a mutual association has to charge all members the same rate. The difference is that there are no underwriters making the decision.

Insurance companies can collect whatever information they want regarding you and your property as long as it has some vague relevance to underwriting. They can and do sell that information on, along with information on claims. Do betting markets do better here, focusing on external facts: where the hurricane makes landfall, how much snowpack there is at a certain location on April 1? I don't know, that's why I'm asking. What's the objection to focusing on the actual risk, and abstracting away the actor placing the bet?

Regarding that hypothetical clinical trial:

1) Someone could bet that the clinical trial's outcome is successful because if they live through it they're going to need money to survive.

2) Someone could bet that the clinical trial's outcome is failure because it's cheaper than burial insurance.

Could I prevail on you to try harder?

Edit: Is the real objection that nobody gets to invest and profittake on the pool?

	▲	quantified 6 hours ago \| parent [-]
		Sorry, which objection are you referring to?

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autoexec 9 hours ago | parent | prev [-]

> If you want to ban profiting from the failure of clinical trials, you would start with the stock market

It's not really a winning argument to say "We should be allowed to make money doing this harmful thing because many other people are also making money in a very different way with a different set of risks and potential harms"

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m3047 7 hours ago | parent [-]

What is a "winning argument"? Let's say two parties in an argument both make ad hominem arguments against the other party. Is the winning party's ad hominem "winning"? Just because the party won? There is no question of merit? What if both parties level the identical ad hominem argument against the other party? It's "winning" because survivorship bias and convenient amnesia (the winner gets to rewrite history)? What's going on here?

	▲	autoexec 6 hours ago \| parent [-]
		What's going on is that a company was caught doing something deplorable and dangerous and because they couldn't deny their actions were a problem their spokesperson just pointed to stock market short sellers and said "What about them!" It's embarrassing that Kalshi's spokesman thought that statement would make the company look any better.