I don’t really understand the argument for prediction markets if you don’t have inside information. The reason they beat other forms of news is because insiders are incentivised to bet, that makes some sense. But surely an investor without insider knowledge will always make less money on a market where they’re trading against insiders than one where they’re not.

You forget that people are not necessarily doing this for rational reasons.

Some people do it for for entertainment, some people are gambling addicts, some people think they have a strong grasp or inside knowledge when they don't.

It is, at root, a casino. Apply your lens to any casino game, and it shouldn't exist (some very narrow exceptions apply in the casino).

The argument is not that you should bet on prediction markets, the argument is that you should use the odds from the market to make decisions about the future.