[kmeisthax]

People with subject knowledge can make money, but no mechanism guarantees that the majority of people using the market are subject matter experts. If anything, most people using the prediction market are going to be people paying to make their chosen outcome look more preferable. They aren't trying to make a financial payoff on the bet, they're trying to make an emotional payoff and are willing to lose money doing so.

[gnepon]

This is the best case scenario for prediction markets I think, as it means the odds more accurately reflect the outcome likelihood (e.g. people aren't betting against their favourite in an hedge against emotions).

At least then they would break even in an efficient market. But it isn't an efficient market due to fees and opportunity cost... So you're right, it is irrational to participate.

[immibis]

So bet the correct way and make the financial payoff those people won't. What's the problem?