> Prediction markets are useful to society for some things
Like what? Insider trading?
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Hedging events with poor or no insurance penetration. For instance, suppose you had to pre-pay in advance for a venue for Spanish soccer finals game party before you know if they go to finals, you might hedge your position by betting against them going to the finals, especially if the chance was very high as a small premium would protect you against a total loss.
Another common one is war. Most insurances don't cover acts of war. Getting underwriting can be difficult especially for smaller amounts / people with little access to finance industry. Betting on war can hedge real estate or other exposed holdings.
It falls apart if the event being insured can be influenced by at least one person. Because if one person can influence that event, then there is an avenue for that event's to be modified.
*event's probability
The disconnect of ivory tower tech workers from normal people has never been more apparent.
I fail to see how either of those are useful or beneficial to society.
Ah yes, real estate speculation. What a boon for society this betting market provides.
For example predicting whether a government infra project (california rail, etc) will complete under budget and within stated timelines. If the probability of this happening is low on prediction markets, corrective action can be taken. More generally, I think prediction markets can significantly improve capital efficiency by being a leading indicator of misallocation.
You can also imagine using such prediction markets to incentivize speed + proper allocation by pre-purchasing "Yes" and awarding these shares as part of the involved people's compensation.