In this guide
What Is a Prediction Market?
Prediction markets are venues where traders exchange contracts tied to the likelihood of future occurrences. Each contract's market value mirrors the aggregate probability assessment held by all participants for that specific event. PolyGram operates as a UK-based prediction market platform offering exposure to international events.
How Do Prediction Markets Work?
The fundamental structure of a prediction market centres on a straightforward proposition: will Event X materialise before Date Y? Consider this illustration: "Will the Labour Party secure victory in the forthcoming UK general election?" Two distinct contract types exist:
- YES: Settlement value of $1.00 if Labour prevails
- NO: Settlement value of $1.00 if Labour does not prevail
Should the YES contract trade at $0.65, participants interpret this as a 65% likelihood of Labour's victory. You may acquire YES contracts if you believe the outcome more probable, or NO contracts if you assess it as less probable. Correct predictions generate returns; incorrect ones result in capital loss.
Prediction Markets vs Traditional Betting
- Absence of overround: Traditional bookmakers incorporate a profit margin — prediction markets eliminate this. YES and NO contract prices combine to approximately $1.00
- Early exit capability: Liquidate your position at any moment prior to final settlement
- Full transparency: Market participants access all pricing information and order book details openly
- Distributed intelligence: Contract valuations synthesise insights from numerous market participants — typically delivering superior accuracy compared to conventional surveys
Types of Prediction Markets
Political Markets
Parliamentary contests, public approval metrics, legislative developments, ministerial succession. Platforms such as Polymarket concentrate substantial trading volume and depth in these categories.
Sports Markets
Game results, championship victors, individual performance benchmarks, divisional standings.
Crypto Markets
Digital asset price milestones, blockchain evolution, fund authorisations, governmental oversight announcements.
World Event Markets
Financial indicators, meteorological catastrophes, technological breakthroughs, cultural accolades.
Are Prediction Markets Legal in the UK?
Within the United Kingdom, prediction markets occupy an ambiguous regulatory position. The Gambling Commission has neither formally authorised nor explicitly prohibited them. Operators including PolyGram function via distributed ledger settlement mechanisms, distinguishing them structurally from conventional gambling enterprises.
How Accurate Are Prediction Markets?
Empirical evidence demonstrates that prediction markets consistently surpass specialist analysts and statistical polling methodologies in forecast precision. Polymarket's contract prices accurately reflected the 2024 US election results, numerous contests across Europe, and significant cryptocurrency developments—frequently with months of advance accuracy.