alt Hacker Newsthere is some inevitable "insider trading" in commodities markets. for example if you're a giant agricultural company, and you want to hedge the price of soybeans, you have some extremely relevant insider information about the soybean market. but you're still allowed to trade soybean futures. very different than securities.
if prediction market contracts really are regulated as commodities, then presumably a lot of insider trading must be legal, although there must be limits of one kind or another and probably if you do something really egregious you might be prosecuted under some legal theory.
An agricultural company hedging the price of soybeans is precisely hedging, not speculation. The insider information they have is their supply/demand/pricing picture. That's different than the colloquial definition of insider information which I've always taken to tie to event occurrence (or not).