Prediction markets are becoming an increasingly visible part of sports, politics, business, and culture. But what makes them different from traditional betting?
Abraham Wyner, Wharton Professor of Statistics and Data Science and Co-Director of the Wharton Sports Analytics and Business Initiative, explains the wisdom-of-crowds theory behind prediction markets, how these platforms make money, and why their structure creates a different relationship between bettors and the market. He also examines regulation, the risks of gambling, and whether prediction markets and sportsbooks can continue growing alongside one another.
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