Prediction markets and gambling sites might seem similar on the surface, but they're fundamentally different beasts. Here's why.

Prediction markets are information aggregation systems. You're betting on real-world outcomes—election results, weather patterns, tech product launches. The crowd collectively prices in available information. Winners and losers cancel out over time if the market's functioning right. Think Polymarket or Manifold Markets. The mechanism incentivizes honest signal-making because accuracy determines payoffs.

Casino gambling? Pure probability. The house takes a fixed edge regardless of outcome. You're playing against algorithms and odds designed to favor the operator. No information advantage helps you. It's entertainment packaged as betting.

The key distinction: prediction markets reward correct information and decision-making. Casinos reward luck while structurally tilting against participants. One's financial infrastructure; the other's redistribution machinery. The regulatory landscape reflects this too—many jurisdictions treat prediction markets as derivatives or prediction mechanisms rather than gambling.