[tgma]

The uniquely problematic aspect of prediction markets is not really the personal aspects of gambling. There are plenty of speculative vehicles. The problem is it subverts natural incentive structures that society has evolved to reward, by introducing another incentive signal; one that sometimes can be many times bigger, thereby manipulating the natural, real-world, outcomes.

If you were playing in the World Cup in the lesser teams, very often betting+sabotage/plausible negligence would have been a more profitable enterprise for you than to actually do your best to win.

Stock markets have this problem too, but they are much more regulated, and even if manipulated by insiders, the blast radius is smaller and often auditable.

[crooked-v]

You're just describing the preexisting problems that led to bans and regulations on sports gambling.

[tgma]

Yes, just one obvious example -- extrapolate to general life. That said, ease of access and scale beyond a critical point can make it qualitatively different.