In this guide
What Is a Prediction Market?
Prediction markets are financial venues where traders exchange contracts whose value depends on whether specific future occurrences come to pass. The contract price at any moment encodes the aggregate market view of how likely that event is to materialise. PolyGram offers UK users access to a broad spectrum of global prediction markets.
How Do Prediction Markets Work?
At their core, prediction market contracts pose a straightforward question: will Event X occur before Date Y? Consider this illustration: "Will the Labour Party secure victory in the forthcoming UK general election?" Two opposing contracts exist for settlement:
- YES: Pays $1.00 upon confirmation that Labour wins
- NO: Pays $1.00 if Labour does not prevail
When YES trades at $0.65, traders collectively estimate a 65% likelihood of Labour's victory. You might purchase YES if you believe the odds favour them, or NO if you expect an alternative outcome. Correct predictions yield gains; incorrect ones result in capital loss.
Prediction Markets vs Traditional Betting
- No overround: Traditional bookmakers embed profit margins into their odds — prediction markets eliminate this. YES and NO prices together approximate $1.00
- You can sell before resolution: Exit your position at any time prior to the event concluding
- Transparent: Market participants observe all pricing and order book activity openly
- Crowd wisdom: Thousands of independent traders contribute information that coalesces into prices — typically surpassing accuracy of conventional polling
Types of Prediction Markets
Political Markets
Electoral contests, public sentiment measures, legislative decisions, and shifts in political leadership dominate this segment. Platforms such as Polymarket see the highest trading volumes and tightest spreads in this category.
Sports Markets
Game results, championship victors, individual athlete performance benchmarks, and standings movements.
Crypto Markets
Bitcoin valuation milestones, blockchain technology improvements, spot exchange product launches, and compliance developments.
World Event Markets
Macroeconomic data releases, geological phenomena, technological breakthroughs, and cultural recognition ceremonies.
Are Prediction Markets Legal in the UK?
The regulatory status of prediction markets within the United Kingdom occupies an ambiguous space. The Gambling Commission has neither granted formal authorisation nor issued prohibitions against them. Operators including PolyGram function via blockchain-based settlement mechanisms, a structural distinction from conventional gaming frameworks.
How Accurate Are Prediction Markets?
Empirical studies demonstrate that prediction markets consistently deliver superior forecasting performance relative to professional analysts and statistical polling models. Polymarket's track record includes accurate calls on the 2024 US presidential election, numerous contests across Europe, and significant cryptocurrency sector developments — often weeks or months ahead of conventional wisdom.