The problem with insider trading in prediction markets isn't the "prediction" part, it's the "markets" part. Once there is real money changing hands, then the purpose of the prediction market stops being "surface information" and starts being "make money" (POSIWID sense of purpose). Since the money changing hands is a necessary incentive for the insiders to provide the information, the parts cannot be disentangled and the problem is fundamental.

Note also that prediction markets can't be too different from financial markets because prediction markets are in some sense a generalization of financial markets e.g. you can make a prediction market that predicts the price of some stock on some day.