I agree with the content of the article, but feel a summary is sufficient to get the point across. Beginning with a quote: > If someone claims to have better i

I agree with the content of the article, but feel a summary is sufficient to get the point across. Beginning with a quote: > If someone claims to have better information than a mainstream financial market on the value of Google stock, or of copper, they ought to either use this knowledge to make a huge amount of money or stop talking about it. However, it is not true if we are discussing prediction markets. Current prediction markets are so bad in so many different ways that it simply is not surprising for people to know better than them, and it often is not possible for people to make money from knowing better. Ok so why is this? - Betting markets are illiquid, there is not enough activity for good price discovery. - Betting markets are capital inefficient. In real life I can short a security without putting up any cash up front, paying interest as my position ages. To make a x:1 return in the betting market I must collateralize (lock away) the entire "1" at the outset. Another example: Say I think Trump will make it to the end of his term as president, right now on PredictIt I can make $1 for every ~$0.80 bet. In real markets I'd sell "no" shares to collect the $0.20 premium for essentially free (if I'm right). On PredictIt I have to stake $0.80 upfront (by buying "yes" shares) for every $0.20 I want to make. - Betting markets are EXPENSIVE. PredictIt takes a 10% fee on profits and then a 5% fee on all withdrawals. So not only do you have to be right, you have to hit it on a huge margin!