In this guide
What Is a Prediction Market?
Prediction markets are financial venues where traders exchange contracts tied to the resolution of forthcoming events. The quoted price of any contract embodies the aggregated market view on the likelihood of that event materialising. PolyGram operates as a UK-accessible platform offering exposure to prediction markets spanning global occurrences.
How Do Prediction Markets Work?
At their core, prediction market contracts pose a straightforward proposition: will Event X materialise before Date Y? Consider the example: "Will Labour secure victory in the forthcoming UK general election?" Two opposing contracts are offered:
- YES: Delivers $1.00 upon Labour's electoral victory
- NO: Delivers $1.00 should Labour fail to win
When the YES contract trades at $0.65, this signals the market's assessment of a 65% chance of Labour prevailing. Traders purchase YES contracts if they anticipate a higher likelihood, or NO contracts if they expect a lower likelihood. Correct predictions yield gains; incorrect ones result in capital loss.
Prediction Markets vs Traditional Betting
- Absence of overround: Traditional bookmakers embed a profit margin — prediction markets eliminate this. YES and NO prices combine to approximately $1.00
- Early exit capability: Liquidate your position at any point before the outcome crystallises
- Full transparency: Market participants access complete pricing information and order book visibility
- Distributed intelligence: Prices synthesise insights from a vast network of market participants — frequently surpassing the accuracy of conventional surveys
Types of Prediction Markets
Political Markets
Electoral contests, public sentiment indices, legislative decisions, governmental transitions. These categories dominate activity and liquidity across platforms such as Polymarket.
Sports Markets
Game results, championship victors, athlete performance metrics, divisional standings.
Crypto Markets
Digital asset valuations, blockchain protocol developments, fund product launches, compliance shifts.
World Event Markets
Macroeconomic signals, climate phenomena, technological breakthroughs, cultural ceremonies.
Are Prediction Markets Legal in the UK?
The regulatory standing of prediction markets within the UK remains ambiguous. Neither explicit authorisation from the Gambling Commission nor formal prohibition exists. Operators including PolyGram function via blockchain-based settlement mechanisms, distinguishing them from conventional gambling infrastructure.
How Accurate Are Prediction Markets?
Empirical evidence demonstrates that prediction markets consistently outperform professional analysts and statistical polling models. Polymarket's track record encompasses accurate forecasting of the 2024 US presidential election, numerous contests across Europe, and significant cryptocurrency developments—often with months of lead time.