In this guide
What Is a Prediction Market?
Prediction markets are financial platforms where traders exchange contracts tied to the likelihood of specific future occurrences. The contract's market price represents the aggregated probability assessment across all participants for that event to materialise. PolyGram provides UK-based traders with access to a wide range of international 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 Conservative Party secure victory in the next UK general election?" Two distinct contracts exist for this scenario:
- YES: Pays out $1.00 should the Conservative Party win
- NO: Pays out $1.00 should the Conservative Party fail to win
When YES trades at $0.65, traders collectively assess a 65% chance of Conservative victory. You purchase YES if you believe the probability is higher, or NO if you reckon it's lower. Correct predictions yield gains; incorrect ones result in losses on your investment.
Prediction Markets vs Traditional Betting
- Absence of overround: Traditional bookmakers incorporate a built-in profit margin — prediction markets eliminate this. YES and NO prices together equal approximately $1.00
- Early exit capability: Close out your position at any time prior to the event concluding
- Full visibility: Market prices and complete order book information remain openly accessible to all
- Distributed intelligence: Market prices synthesise insights from tens of thousands of active traders — frequently surpassing accuracy of conventional polling methods
Types of Prediction Markets
Political Markets
Electoral contests, public sentiment measures, legislative outcomes, shifts in leadership. These categories dominate trading volume and liquidity across major platforms including Polymarket.
Sports Markets
Game results, championship victors, athlete performance benchmarks, final standings.
Crypto Markets
BTC valuation milestones, blockchain improvements, digital asset fund authorisations, government policy shifts.
World Event Markets
Financial metrics, climate-related incidents, technological breakthroughs, cultural ceremonies and awards.
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 explicitly prohibited them. Operators such as PolyGram function via blockchain-based settlement mechanisms, distinguishing them structurally from conventional gambling enterprises.
How Accurate Are Prediction Markets?
Empirical research demonstrates that prediction markets consistently surpass specialist analysts and conventional polling in forecast accuracy. Polymarket's performance during the 2024 US election, various contests across Europe, and significant cryptocurrency developments showcased remarkable predictive precision, often weeks or months in advance.