This is one of the huge problems with allowing betting. Of course, people could collude without the formal marketplace, but just as social media provides really painful detrimental cons along with its pros, so do betting platforms.

Right now a very limited number of people have a huge stake in how clinical trials turn out. Gambling markets open the field up for all kinds of people to make a bunch of money by interfering in the outcome

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?

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?