In this guide
What Is a Prediction Market?
A prediction market is a financial marketplace where traders exchange contracts whose value depends on whether specified future events materialise. The contract's market price embodies the collective assessment of participants regarding the likelihood of that event taking place. PolyGram offers UK users entry to prediction markets spanning global occurrences.
How Do Prediction Markets Work?
At the core, each prediction market contract poses a straightforward question: will Event X occur before Date Y? Consider this example: "Will the Labour Party secure victory in the forthcoming UK general election?" Two distinct contracts become available:
- YES: This contract settles at $1.00 should Labour prevail
- NO: This contract settles at $1.00 should Labour fail to prevail
When YES trades at $0.65, the marketplace is signalling 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 overestimate them. Correct predictions yield gains; incorrect ones result in losses on your investment.
Prediction Markets vs Traditional Betting
- No overround: Traditional bookmakers embed a profit margin into odds — prediction markets eliminate this. YES and NO prices together equal approximately $1.00
- You can sell before resolution: Close out your position at any moment prior to the event concluding
- Transparent: Market participants enjoy full visibility into pricing and order book activity
- Crowd wisdom: Thousands of independent traders contribute information that gets reflected in prices — typically surpassing polling data in reliability
Types of Prediction Markets
Political Markets
Electoral contests, public confidence measures, governmental decisions, shifts in leadership. Platforms such as Polymarket and Kalshi host the deepest liquidity and highest trading volumes in this category.
Sports Markets
Game results, championship victors, individual athlete performance metrics, divisional standings.
Crypto Markets
Bitcoin valuation milestones, blockchain network enhancements, cryptocurrency investment products, policy developments affecting digital assets.
World Event Markets
GDP growth, weather phenomena, technological breakthroughs, awards ceremonies and entertainment outcomes.
Are Prediction Markets Legal in the UK?
The regulatory standing of prediction markets within the UK remains ambiguous. The Gambling Commission has neither formally authorised nor prohibited them. Operators including PolyGram function via blockchain-based settlement mechanisms, which distinguishes them structurally from conventional gambling offerings.
How Accurate Are Prediction Markets?
Empirical evidence demonstrates that prediction markets consistently deliver superior accuracy relative to professional analysts and survey-based forecasting. Polymarket's track record includes precise calls on the 2024 US presidential election, numerous contests across Europe, and significant cryptocurrency developments—often weeks or months in advance of conventional wisdom.