Making insider/true expert information public more quickly in the form of influencing prices in a toy market is THE ENTIRE POINT of prediction markets.
It might've been the original purpose but in practice prediction markets have turned into a tool for gambling.
It also creates weird incentives. If I want to pay a politician to do something, bribing them would generally be illegal. But what if I instead bet lots of money that they won't do it?
This may be the purpose of a prediction market for an outside observer. But the outside observer and the US government (or any org that holds private information) have different purposes - it's an adversarial mechanism.
In particular: the government is free to just publish any insider/true information that it wants the public to know about. If it shared that purpose then the market wouldn't need to exist.
True experts need not be the people with the ultimate ability to effect change. Professional sports organizations ban their players from betting on games because it creates bad incentives to throw a winnable game. Banning elected representatives from gambling on prediction markets doesn’t make it impossible for insider information to surface, but it does prevent the governance equivalent of match fixing.
> Making insider/true expert information public more quickly in the form of influencing prices in a toy market is THE ENTIRE POINT of prediction markets
American taxpayers pay a lot of money for a military and intelligence advantage. It's not clear it's in our interest for that knowledge to be made "public more quickly."
What we don’t want, and what we should enforce, is participants in prediction markets influencing the events they’re betting on (like the recent basketball betting scandal).
It also creates weird incentives. If I want to pay a politician to do something, bribing them would generally be illegal. But what if I instead bet lots of money that they won't do it?