One problem with these prediction markets is that they don't allow you to make predictions on margin. Many bets in prediction markets have very large time horiz

One problem with these prediction markets is that they don't allow you to make predictions on margin. Many bets in prediction markets have very large time horizons. As long as your asset is tied up in the bet, you are losing out on the time-value of money. For example, if you bet $100 on Hillary Clinton winning the 2016 election, you don't get to invest that $100 in treasury bonds or the S&P or whatever, which is a pretty significant cost. On real futures exchanges this is mitigated with margin requirements and the legal threat of suing or bankrupting you if you don't make good on your promise to pay.