In this guide
What Is a Prediction Market?
A prediction market represents a financial exchange where traders buy and sell contracts tied to the likelihood of specific future occurrences. The contract's market value directly mirrors the collective assessment of participants regarding the probability that such an event will materialise. PolyGram provides UK users with entry to prediction markets spanning international events.
How Do Prediction Markets Work?
Each contract posed in a prediction market centres on a straightforward proposition: will Event X occur before Date Y? Take this illustration: "Will the Labour Party secure victory in the forthcoming UK general election?" Participants may choose between two contract types:
- YES: This contract delivers $1.00 should Labour emerge victorious
- NO: This contract delivers $1.00 should Labour fail to win
When YES trades at $0.65, the market signals a 65% likelihood of a Labour victory. You may 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 capital loss.
Prediction Markets vs Traditional Betting
- Absence of overround: Traditional bookmakers embed a profit margin — prediction markets operate without this markup. YES and NO prices combine to approximately $1.00
- Early exit capability: You retain the option to close your position at any moment prior to final settlement
- Full openness: Market participants enjoy visibility into all pricing data and order book activity
- Distributed intelligence: Market prices synthesise insights from numerous participants — frequently delivering superior accuracy compared to conventional surveys
Types of Prediction Markets
Political Markets
Contests for elected office, public confidence metrics, legislative developments, ministerial transitions. These categories dominate in terms of trading volume and participant interest across venues such as Polymarket.
Sports Markets
Game results, championship victors, individual performance metrics, divisional standings.
Crypto Markets
BTC valuation thresholds, blockchain improvements, cryptocurrency investment products, compliance developments.
World Event Markets
Financial statistics, meteorological occurrences, technological breakthroughs, cultural ceremonies.
Are Prediction Markets Legal in the UK?
The regulatory standing of prediction markets within the United Kingdom occupies uncertain territory. They lack formal authorisation from the Gambling Commission yet face no explicit prohibition. Operators such as PolyGram function via distributed ledger technology for settlement, distinguishing them from conventional gaming enterprises.
How Accurate Are Prediction Markets?
Empirical investigation repeatedly demonstrates that prediction markets surpass specialist analysts and survey-based forecasting in accuracy. Polymarket's track record encompassed successful projections of the 2024 US presidential election, numerous contests across the European continent, and significant developments in the digital asset space, with forecasts materialising months in advance.