They are illegal - because it is impossible to limit the participants to just betting on the outcome instead of trying actively to get the outcome. Imagine for

They are illegal - because it is impossible to limit the participants to just betting on the outcome instead of trying actively to get the outcome. Imagine for example a prediction market for Obama dying this year - if the price is big enough it would become an assassination market. Nick Szabo explains it in: http://unenumerated.blogspot.co.uk/2015/05/small-game-fallacies.html http://unenumerated.blogspot.co.uk/2015/05/small-game-fallac...