I thought the entire point of prediction markets was to attract insiders with a way to turn their knowledge into cash. Doesn't that imply that everybody else is going to be net negative?

That's why death pools were supposed to be equivalent to assassination markets. Somebody would kill the person to win.

The only way (I would think) to make money if you're not an insider is to take advantage of the fact that most people believe in the Law of Averages and consistently err to moderation, so they overestimate small chances and underestimate large chances. Just bet with the crowd when the crowd (and reason) is overwhelmingly on one side. That depends on the vig being low enough not to obliterate that little bit of expected profit, though.