I think the other big objection is that the value of the information you can get from a prediction market basically only approaches usability as the time to market close approaches zero. If you’re trying to predict whether an event is actually going to happen you usually want to know with enough of a time lead to actually do something about it, but at the same time that “do something about it” is going to impact the actual event being predicted and get “priced in.”

It’s that old business aphorism about making a metric into a target. Even if prediction markets were unambiguously useful as informational tools and didn’t have any of the incredibly obvious perverse incentives and power imbalances that they do, as soon as you try to actually use that information to do anything the market will start to change based on the perception of the market itself. Like, if there’s a market on someone being assassinated, you need to factor in not only the chances of it happening on its own but also the chances of it happening given that a high likelihood from the prediction market will result in additional safety measures being deployed or given that a small likelihood from the market may cause them to take on riskier public appearances or otherwise create more opportunities. If you don’t actually use the information for anything then it might be capturing something, but that something becomes wildly self-referential is the information is actually used in any way.