> I do wonder if the problem with them is that it creates an incentive to share the truth, or for very smart people to predict it....

You missed the obvious one: it creates a path for people with insider knowledge to monetize it at the expense of employers, institutions, etc.

The guy using his access to classified information to make a few hundred thousand bucks in a day is not interested in "sharing the truth" for the benefit of society.

When I saw Ratsphere types pushing these kinds of markets years ago getting insider information was the primary selling point.

It’s not inherently stupid - I’d much rather that some lowly analyst sell out an impending stock hit for a few grand than well-positioned insiders soak the market for 10,000x that. There’s obvious moral hazards, though.

> monetize it at the expense of

Right, and I'd also like to preempt any apologetics trying to cloak it as socially-beneficial "information discovery."

Many of these betting/insider-trading scenarios are structured so that the information only becomes revealed at the same moment it becomes worthless. (In some cases, that's just a return to its default state.) Like the value of knowing the winning numbers from an expired lotto draw.