Like any insider trading you are transferring money from the public to yourself. More interestingly for the prediction market angle: you are leaking secret info

Like any insider trading you are transferring money from the public to yourself. More interestingly for the prediction market angle: you are leaking secret information by doing that. If you make big trades in anticipation of specific events other market participants can see it. That could be extremely serious if say it endangers a military operation.