Prediction markets are not just for betting. They are becoming a valuable source of predictive data for enterprises, as shown by new partnerships with media giants like CNN and CNBC. This dual-purpose model, functioning as both a consumer product and a B2B data service, creates two distinct revenue streams.

New platforms frame betting on future events as sophisticated 'trading,' akin to stock markets. This rebranding as 'prediction markets' helps them bypass traditional gambling regulations and attract users who might otherwise shun betting, positioning it as an intellectual or financial activity rather than a game of chance.

Speculation is often maligned as mere gambling, but it is a critical component for price discovery, liquidity, and risk transfer in any healthy financial market. Without speculators, markets would be inefficient. Prediction markets are an explicit tool to harness this power for accurate forecasting.

Products like options or prediction markets for specific metrics (e.g., company earnings) appear complex but can be simpler for investors with a specific thesis. They allow a direct bet on a single variable, avoiding the noise and multiple factors that influence a broad proxy like stock price.

The true value of prediction markets lies beyond speculation. By requiring "skin in the game," they aggregate the wisdom of crowds into a reliable forecasting tool, creating a source of truth that is more accurate than traditional polling. The trading is the work that produces the information.

The next evolution of finance will break away from the traditional "portfolio and search box" interface. Instead, trading will be embedded directly into new contexts and "modalities." Examples include trading via Telegram bots, placing micro-bets on live sports via a TV interface, or interacting with prediction markets directly within a news article.

Prediction markets have existed for decades. Their recent popularity surge isn't due to a technological breakthrough but to success in legalizing them. The primary obstacle was always legal prohibition, not a lack of product-market fit or superior technology.

Prediction markets are accelerating their normalization by integrating directly into established ecosystems. Partnerships with Google, Robinhood, and the NYSE's owner embed gambling-like activities into everyday financial and informational tools, lowering barriers to entry and lending them legitimacy.

CME Group's CEO uses the analogy of Sears being disrupted by Amazon to explain the strategic imperative for embracing retail trading. The fear of becoming obsolete by failing to adapt to new market participants and technologies is a primary motivator for legacy exchanges to partner with modern platforms like FanDuel.