It is illegal to insider trade in financial markets, which makes sense to me. But financial markets and prediction markets are different; one exists to surface capital, the other information.

Insider trading is forbidden in financial markets because allowing it would be a disincentive to participation by non-insiders, which would be bad because it would reduce the amount of capital the market was able to provide.

In prediction markets, allowing insider trading would be disincentive to participation by non-insiders, which would be a good thing, because the market should surface the most accurate information as possible and insiders have more accurate information than non-insiders.

> and has long been recognized as such.

Prediction markets are in their infancy. They've only really existed for about a decade and even now are tiny compared with markets like commodities or equities. So I don't see how this could have been "long recognized."

> It is outrageous for you to suggest that it is a good thing.

This is not an argument.

> You certainly wouldn't participate in a market where you did not think you had fair odds.

Of course I wouldn't and I wouldn't advise anyone else to do so. But why would we want uninformed people participating in prediction markets? I don't think they should.

What does "fair" even mean here? If Alice is more informed than Bob about X, she'll probably be better at making predictions about X. I guess it is "unfair," but what would the point of a prediction market be if we only allowed uninformed people to participate? Then it's more like a survey of what the average person thinks will happen, which is probably common knowledge, so we don't need a market to find that out.

> Finally, since you're trying to work the information angle, would you care to share any legitimately meaninful information you've gained from prediction markets?

Prediction market odds for elections and important world events are regularly quoted in the press and AFAICT seem to more accurate than pundits and and oped writers at predicting the future. A low bar, but still, if we are going to speculate about the future, we might as well see what actually informed people think.