I prefer prediction markets to gambling because the platform isn't the bookmaker. This reduces the adverse selection of players. For instance, if you actually win regularly on these platforms they'll actually ban you, much like a casino. My understanding of prediction markets is that it's pure market making which is preferable
In theory this should limit the damage insiders can do, since as the probability of encountering an insider rises the market makers will need to widen the spread.
Except there is still adverse selection, just like there is in the stock market. People who have inside information are going to bet more, and you will take the other side of that bet not realizing that has happened.
