I think we got “lucky” for a while when prediction markets were a small niche interest and they provided a weird novel way of making predictions.

But once they get big enough to attract the attention of people that directly affect the outcomes they will eventually become useless because people will realize the only options are to have inside information or be willing to hand money over with inside info.

The only “fair” outcomes will be things outside human control, like betting on the weather.

That's absolutely it. Cheaters or chumps, neither of whom should be encouraged.

Or you are simply better at predicting the future than most other people.

I’m sure that’s what the gambling addicts like to tell themselves.

Being good at predicting the future will give you only a slight edge, so even a small amount of inside trading can make you unprofitable.

Being good at predicting is a broad skill which is applicable widely, while insider information only works for the specific thing the information is about. Far from every market will have insiders with special information. E.g. on who will win an election.

Not really. I have a pretty solid 5+% edge over a long time period even on the competitive markets I bet in. On many markets I think it's closer to 10-20%. These are things that inside information can't really help as much as you'd think.

And even on markets where someone would benefit from inside information... insiders leak a lot more information than you'd think before it tends to hit the market. Even reading the news can tell you more than you'd think if you look at it right. The single biggest hint is "Why am I reading this, and why now?". News stories on geopolitics almost never arise naturally, and that question will get you to a LOT of information that was not explicitly stated.