alt Hacker NewsSports betting is the one place that "prediction markets" make the most sense. Instead of there being a house to win against, the market just skims a fee. The line is set organically by betters, not be the house targeting a profit margin, and the house has no incentive to restrict successful betters because they solely profit on flow, not losses.
You do have to be careful to avoid letting whales manipulate the perceived market. There are ways to con other gamblers with carefully timed bets.
The bigger the market the harder that is, so maybe it doesn't apply at the level of online sports betting. But organized crime could make trouble at horse tracks.