The entire finance industry does a fancy form of betting. Risk and reward are packaged up and bought and sold by people according to their preferred allotment,

The entire finance industry does a fancy form of betting. Risk and reward are packaged up and bought and sold by people according to their preferred allotment, and once the outcome is known the spoils (or losses) are correspondingly shared. Prediction markets can also be called "information markets" because they expand the class of things we can understand the risk characteristics of beyond the traditional instruments. Lloyds of London began by issuing insurance on shipping vessels so that ship owners shared the risk of a wreck across all their fleets, reducing the devastation of losing a ship for each individual owner. Prediction markets let us do this for a host of other outcomes. A prediction market is nothing more than a betting market, the innovation (attributable to Robin Hanson, I believe) is the idea of the binary future, which makes the probabilistic outcome work nicely with a traditional futures contract structure, and allows for a lot of nice intuitions based on price movement.