> Is insider trading a crime on prediction markets?

Yes, it is both against the CFTC's regulations and against the companies' T&Cs.

> Doesn’t it contribute to the accuracy of the pricing of prediction contracts, and therefore is good for the prediction market?

That's irrelevant, the purpose of these markets is to provide fair bets for entertainment, not information.

> against the companies' T&Cs

Not a crime, or certainly shouldn't be.