What Is a Prediction Market?
A prediction market is a financial market where participants trade contracts based on the outcome of future events. The price of each contract reflects the market's collective probability estimate for that event occurring. PolyGram is a UK-accessible prediction market giving access to global events.
How Do Prediction Markets Work?
Each prediction market contract asks a simple question: will Event X happen by Date Y? For example: "Will Labour win the next UK general election?" Two contracts are available:
- YES: If Labour wins, this contract pays $1.00
- NO: If Labour doesn't win, this contract pays $1.00
If the current YES price is $0.65, the market estimates a 65% probability of Labour winning. You can buy YES if you think it's more likely, or NO if you think it's less likely. If you're right, you profit; if wrong, you lose your stake.
Prediction Markets vs Traditional Betting
- No overround: Bookmakers build in a margin — prediction markets don't. YES + NO prices sum to ~$1.00
- You can sell before resolution: Exit any position before the outcome is decided
- Transparent: All prices and order book data are public
- Crowd wisdom: Prices aggregate information from thousands of traders — often more accurate than polls
Types of Prediction Markets
Political Markets
Elections, approval ratings, policy outcomes, leadership changes. These are the most popular and most liquid on platforms like Polymarket.
Sports Markets
Match outcomes, tournament winners, player statistics, league positions.
Crypto Markets
Bitcoin price targets, protocol upgrades, ETF approvals, regulatory events.
World Event Markets
Economic indicators, natural disasters, scientific milestones, entertainment awards.
Are Prediction Markets Legal in the UK?
Prediction markets exist in a legal grey zone in the UK. They are not explicitly licensed by the Gambling Commission but are also not explicitly banned. Platforms like PolyGram operate on a blockchain settlement basis, which differs from traditional gambling.
How Accurate Are Prediction Markets?
Research consistently shows prediction markets outperform expert forecasters and polling averages. Polymarket correctly predicted the outcomes of the 2024 US election, multiple European elections, and major crypto events months before they occurred.