alt Hacker News"Why prediction markets aren't popular" [0] gives some compelling arguments (to me) about why prediction markets haven't caught on and probably never will.
As I understand it, the main argument is that for prediction markets that aim to incentivize the thing they're predicting, better to invest in the thing directly. Otherwise, "prediction markets" are successful precisely when they can't influence the outcome, like sports betting.
I remember finding the election betting interesting last presidential election, but I also remember that it was spiked when Musk invested to change the odds.
[0] https://worksinprogress.co/issue/why-prediction-markets-aren...
Musk, being the world's richest person, is something of an outlier. He can afford to give free money to the market for longer than anyone else, and the size of the market might not be big enough to handle the imbalance.
There's a level of irrational spending which only institutional investors can counterbalance, and they might not have the risk appetite to get into a single market on a relatively less regulated platform that could rug pull them.