Well, you can also use normal lotteries for money laundering: https://www.ftm.eu/articles/reynders-charged-in-money-launde...

Because there's pre-existing demand for lottery tickets that provides some plausible deniability for the money-laundering use case. If prediction markets were primarily used to buy insurance against hard-to-avoid expensive events, that's what money launderers would trade in too, in order to blend in.

Instead, most volume is in sports bets. People just like to gamble.