[LanceH]

Who would the charges be against? The person who violated some trust, or the market maker?

I could be pretty neutral on the market maker, really. The point of a prediction market is to put information to use.

There may be some line to be drawn on such markets, but that line really isn't drawn. There are just vague gestures that it is both gambling and not gambling due to insider information.

If you wanted to regulate it, legislate which markets can be made. Require notification that it is not gambling and is all about the trading of insider information and that gamblers have less than "fair" odds.

[nyeah]

>not gambling due to insider information.

I can't make this argument work at all. Gambling with some cheating is still gambling.