In this guide
What Is a Prediction Market?
Prediction markets are trading venues where participants exchange contracts whose value depends on whether specific future occurrences come to pass. Each contract's market price embodies the aggregate probability assessment held by all active traders regarding that event's likelihood. PolyGram operates as a UK-based prediction market platform offering exposure to international events and outcomes.
How Do Prediction Markets Work?
At their core, prediction market contracts pose a straightforward proposition: does Event X materialise before Date Y? Consider the question: "Will the Labour Party secure victory in the forthcoming UK general election?" Two opposing contract types exist for this binary outcome:
- YES: Holders receive $1.00 should Labour prevail
- NO: Holders receive $1.00 should Labour fail to prevail
When YES contracts trade at $0.65, the market implies a 65% likelihood of Labour's electoral success. Traders purchase YES contracts if they believe the probability is higher, or NO contracts if they believe it is lower. Correct positions generate gains; incorrect positions result in capital loss.
Prediction Markets vs Traditional Betting
- Absence of bookmaker margin: Traditional bookmakers embed a profit spread — prediction markets eliminate this. YES and NO contract prices aggregate to approximately $1.00
- Exit flexibility: Traders may liquidate positions at any time before settlement, without waiting for final resolution
- Full transparency: Market participants access real-time pricing and complete order book visibility
- Distributed intelligence: Thousands of independent traders contribute information to price discovery — frequently surpassing accuracy of conventional polling methodologies
Types of Prediction Markets
Political Markets
Electoral contests, public approval metrics, legislative outcomes, and succession events dominate this category. Political prediction markets maintain the highest trading volumes and liquidity across major platforms including Polymarket.
Sports Markets
Individual match results, championship victors, athlete performance benchmarks, and divisional standings form the basis of sports-focused prediction contracts.
Crypto Markets
Digital asset price milestones, blockchain protocol developments, spot exchange-traded fund launches, and regulatory determinations represent key crypto market categories.
World Event Markets
Macroeconomic data releases, meteorological phenomena, technological breakthroughs, and cultural award ceremonies span the diverse world events category.
Are Prediction Markets Legal in the UK?
The UK regulatory framework for prediction markets occupies uncertain legal territory. Neither explicit authorisation from the Gambling Commission nor formal prohibition currently applies. Blockchain-based platforms such as PolyGram operate under settlement mechanisms that diverge fundamentally from conventional gambling infrastructure, creating distinct regulatory considerations.
How Accurate Are Prediction Markets?
Empirical analysis demonstrates that prediction market prices consistently deliver superior forecasting performance relative to professional analysts and survey-based polling. Polymarket's track record includes accurate predictions of the 2024 US presidential election, numerous European electoral outcomes, and significant cryptocurrency sector developments—frequently months ahead of conventional consensus.