In this guide
What Is a Prediction Market?
Prediction markets are venues where traders exchange contracts whose value hinges on whether specific future occurrences come to pass. The contract's market price embodies the aggregated view of all participants regarding the likelihood of that event materialising. PolyGram operates as a UK-based prediction market platform, granting traders exposure to outcomes across the globe.
How Do Prediction Markets Work?
At their core, prediction market contracts pose a straightforward question: will Event X materialise before Date Y? Consider this example: "Will the Labour Party secure victory in the forthcoming UK general election?" Traders can choose between two contract types:
- YES: Yields $1.00 should Labour prevail
- NO: Yields $1.00 should Labour fail to prevail
When YES trades at $0.65, the collective market sentiment suggests a 65% chance of Labour's victory. You might purchase YES if you believe the odds underestimate their chances, or NO if you reckon they're overstated. Correct predictions generate returns; incorrect ones result in capital loss.
Prediction Markets vs Traditional Betting
- No overround: Traditional bookmakers embed profit margins into odds — prediction markets eliminate this. YES and NO prices converge to approximately $1.00
- You can sell before resolution: Exit your holding at any point prior to the event concluding
- Transparent: Market participants enjoy full visibility into pricing and order book mechanics
- Crowd wisdom: Prices synthesise insights from multitudes of independent traders — frequently surpassing the accuracy of conventional polling methodologies
Types of Prediction Markets
Political Markets
Electoral contests, public approval metrics, legislative outcomes, governmental transitions. Platforms such as Polymarket feature these as their highest-volume offerings.
Sports Markets
Game results, championship victors, athlete performance metrics, divisional standings.
Crypto Markets
Bitcoin valuation milestones, blockchain evolution, cryptocurrency fund authorisations, compliance developments.
World Event Markets
Macroeconomic statistics, climate-related incidents, technological breakthroughs, cultural accolades.
Are Prediction Markets Legal in the UK?
The regulatory standing of prediction markets within the UK occupies uncertain terrain. The Gambling Commission has neither formally authorised nor prohibited them. Operators including PolyGram function through decentralised settlement infrastructure, positioning themselves distinctly from conventional gaming enterprises.
How Accurate Are Prediction Markets?
Empirical evidence repeatedly demonstrates that prediction markets deliver superior forecasting performance relative to institutional analysts and statistical survey data. Polymarket's track record encompasses accurate calls on the 2024 US presidential race, numerous contests across the European continent, and significant cryptocurrency developments—often weeks or months ahead of conventional wisdom.