Robust futures markets are perfectly capable of protecting producers and consumers from price fluctuations (and help stabilize prices as they do so). Similarly for long term contracts between consumers and suppliers.

I don't know the details, but it seems to be some kind of American sporting event, and getting everything right was exceedingly unlikely.

You can buy bespoke insurance for this kind of thing. See https://en.wikipedia.org/wiki/Prize_indemnity_insurance

By your logic, Warren Buffett should have been able to buy spend just a dollar or so to buy insurance against someone getting everything right, shouldn't he? After all, the chances were exceedingly small and competition would have driven down the insurance premium?

(Government) control is another issue. Obviously, a government run scheme would be under more government control. Though laws are perfectly capable of controlling private sector entities, too.