There is a considerable body of academic work on prediction markets, and I recommend reading it. Inter alia, intentionally moving such a market in a stupid direction to further some sort of fraud or to act out of spite is entirely possible so long as you have an open-ended amount of money to lose. But for those still hoping to dismiss prediction markets, the Dodd-Frank Act, in provision 7 USC section 7a-2(c)(5)(c)(i), gave the CFTC the power to ban certain kinds of event contracts. This includes illegal activities, gaming, war, and terrorism. The CFTC has used that power to forbid NADEX, a regulated market, from offering event contracts for elections. The CFTC gave several reasons for banning the event contracts, including that multiple states had defined placing money on elections to be gambling and that the contracts would not serve any economic purpose such as allowing participants to hedge against an outcome. Libertarians who live in the real world vote Republican, --dan