In this guide
What Is a Prediction Market?
Prediction markets are financial venues where traders exchange contracts tied to the results of forthcoming occurrences. The cost of any given contract mirrors what the broader market believes is the likelihood of that event taking place. PolyGram operates as a UK-based prediction market platform offering exposure to events worldwide.
How Do Prediction Markets Work?
At their core, prediction market contracts pose a straightforward question: will Event X occur before Date Y? Consider this case: "Will the Labour Party secure victory in the forthcoming UK general election?" Two distinct contracts exist for trading:
- YES: Pays $1.00 should Labour emerge victorious
- NO: Pays $1.00 should Labour fail to win
When YES trades at $0.65, this signals the market perceives a 65% chance of a Labour victory. You might purchase YES if you believe victory is more probable, or NO if you reckon it's less probable. Correct predictions yield gains; incorrect ones result in losses on your initial investment.
Prediction Markets vs Traditional Betting
- No overround: Traditional bookmakers embed a profit margin — prediction markets omit this. YES and NO prices combine to approximately $1.00
- You can exit early: Close out your position whenever you wish before the final outcome materialises
- Full transparency: Market participants can view all pricing and order book information openly
- Collective intelligence: Prices synthesise knowledge from multitudes of market participants — typically surpassing accuracy of conventional polling
Types of Prediction Markets
Political Markets
Electoral contests, public sentiment measures, governmental decisions, shifts in leadership. These command the greatest participation and deepest liquidity across major platforms such as Polymarket.
Sports Markets
Game results, championship victors, individual athlete performance metrics, divisional standings.
Crypto Markets
Digital asset valuations, blockchain system enhancements, investment fund authorisations, government regulatory announcements.
World Event Markets
Macroeconomic figures, environmental catastrophes, technological breakthroughs, cultural accolades.
Are Prediction Markets Legal in the UK?
The regulatory standing of prediction markets within the United Kingdom remains ambiguous. The Gambling Commission has neither formally authorised nor formally prohibited them. Operators such as PolyGram function via distributed ledger settlement mechanisms, distinguishing them from conventional gaming operations.
How Accurate Are Prediction Markets?
Empirical evidence repeatedly demonstrates that prediction markets surpass specialist analysts and aggregated survey data in forecasting precision. Polymarket achieved accurate forecasts for the 2024 US presidential race, numerous contests across Europe, and significant blockchain-related developments well ahead of their occurrence.