Kalshi, one of the world’s fastest-growing prediction markets, has a “death carveout.”
On the platform, you can bet on a world leader’s departure from office. If death precipitates that exit, the contract settles at the market price just before the news goes public.
The carveout exists because U.S. Commodity Futures Trading Commission rules prohibit contracts that profit directly from death, assassination, or violence.
So, here we are now, trading ‘event contracts’ (bets) on everything from interest rate announcements to the weather and everything in between. How did we come to mistake algorithmic bookmaking for innovation?
Private investors assigned Kalshi a $22 billion (U.S.) valuation in March, doubling its paper value from just months earlier in December 2025.
How prediction markets actually work
An event contract is a wager priced between one cent and 99 cents based on implied probability, settling at $1 if a specified outcome occurs and zero if it fails.
Surpassing crypto pioneers like Polymarket, Kalshi has popularized these instruments through an interface resembling a brokerage account.
According to an April 2026 survey by Navigator Research, 60 per cent of Kalshi’s active users are between 18 and 34. Push notifications delivered through mobile apps keep users returning throughout the day. Bettors are prompted to trade on breaking news, live sports plays, or late-night political developments as they unfold, with every shift in sentiment recalibrating the spread.
None of this diminishes the power of crowd intelligence if properly bounded.
British statistician Sir Francis Galton demonstrated in 1906 that a crowd of dispassionate observers could accurately estimate the weight of an ox. Decades later, the non-profit Iowa Electronic Markets used capped, low-stakes wagers to track infectious disease outbreaks and election outcomes.
Today, forecasting platforms like Metaculus aggregate crowd intelligence using non-monetary reputation points. Corporations can similarly deploy internal, point-based decision markets among staff to detect operational bottlenecks without offering cash incentives.
Kalshi enabled users to wager on clinical drug trials
Kalshi and Polymarket distort this diagnostic tradition by introducing uncapped financial liquidity to real-world outcomes. Panic or euphoria instantly adjusts the odds of any bet.
Markets thus reshape the incentives surrounding the events they purport merely to forecast.
Consider Kalshi’s enabling users to wager on whether clinical trials for serious illnesses will succeed or fail. A Phase III trial for an Alzheimer’s drug becomes an asset class to be shorted, rewarding traders when the trial fails.
A consistent edge over a binary medical outcome may reward those with privileged access to information. When negative outcomes pay, the temptation to abuse that access inevitably follows.
The same incentives infect the wider market; wagers on niche athletic performances invite point-shaving in low-liquidity sports, while Kalshi’s plan to list contracts on flight cancellation rates was pulled by the company amid a social media backlash fearing manufactured airport disruptions.
Now, comes a U.S. federal investigation into Gabriel Perez, a White House teleprompter operator accused of using advance access to Donald Trump’s speech scripts to reportedly net nearly $100,000 (U.S.) on Kalshi’s phrase-matching markets.
Information that once derived its value from informing the public now acquires a second value only because it can beat a contrived market.
True builders understand the distinction between economic creation and financial engineering. Reflecting on the rise of McCain Foods, the late Canadian industrialist Wallace McCain put the philosophy of enterprise simply: “We never really did it for the money … We liked building things. Our success wasn’t because we were great financial engineers — we weren’t.”
To do real business is to seek enduring human value through problem-solving.
Around-the-clock prediction-market speculation feeds the house while socializing the costs of every gamble, eroding trust and public confidence in regulated financial systems.
While a growing chorus of European jurisdictions — and now state regulators in New York and Utah — have moved to ban or restrict these platforms for operating without gambling licenses, Canadian investment regulators have permitted some discount brokerages to clear a narrow set of event contracts under the polite fiction of financial derivatives.
Platforms like Kalshi and Polymarket should be reclassified as online casinos, permitted only in jurisdictions that explicitly authorize online gaming. They must be tethered to local casino licences, face steep operational taxes, public health surcharges for addiction treatment, and rigorous fraud enforcement.
Financial markets should exist to allocate capital to productive human endeavours, not to facilitate wagers and jubilation over the failure of life-saving medicine.
Prediction markets create no productive value and normalize speculation, erasing the boundary between investment and gambling.
