In this guide
What Is a Prediction Market?
A prediction market is a type of financial exchange where traders buy and sell contracts tied to the likelihood of future occurrences. The contract's market value represents the aggregate probability assessment held by all active participants. PolyGram offers UK-based traders access to a global range of prediction opportunities.
How Do Prediction Markets Work?
Each market poses a straightforward question: will Event X materialise before Date Y? Take this example: "Will Labour secure victory in the next UK general election?" Two opposing contracts are offered:
- YES: Pays $1.00 if Labour secures victory
- NO: Pays $1.00 if Labour fails to secure victory
When the YES contract trades at $0.65, traders collectively estimate a 65% chance of Labour winning. 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
- Zero built-in margin: Traditional bookmakers embed a profit margin — prediction markets eliminate this. YES and NO prices combine to approximately $1.00
- Exit flexibility: You may close your position at any time before the event concludes
- Full transparency: Market participants can view all pricing information and order book activity openly
- Distributed intelligence: Market prices synthesise insights from thousands of independent traders — typically surpassing conventional polling accuracy
Types of Prediction Markets
Political Markets
Electoral contests, public opinion metrics, legislative decisions, shifts in leadership. These categories dominate trading volume and liquidity across platforms such as Polymarket.
Sports Markets
Game results, championship victors, athlete performance benchmarks, divisional standings.
Crypto Markets
Bitcoin valuation milestones, blockchain improvements, spot ETF launches, government policy shifts.
World Event Markets
Inflation rates, seismic activity, technological breakthroughs, awards ceremonies.
Are Prediction Markets Legal in the UK?
Prediction markets occupy an ambiguous legal position within the United Kingdom. The Gambling Commission has neither formally authorised nor prohibited them. Services such as PolyGram function via blockchain-based settlement mechanisms, which operate under fundamentally different principles than conventional gambling establishments.
How Accurate Are Prediction Markets?
Empirical studies demonstrate that prediction markets consistently outperform both professional analysts and survey-based forecasting. Polymarket's track record includes accurate calls on the 2024 US presidential race, numerous elections across Europe, and significant cryptocurrency developments—often weeks or months in advance.