Note that #1 will get kicked off the platform immediately. Even non-inside traders who win significantly more than expected will be kicked off. If you’re on the platform, you’re losing.
Though to your point I think these big winners are not representative of most users, who in my experience often think they're beating the system but in reality just don't log their losses very well. The house always wins etc etc.
Polymarket has a different incentive. They profit when their users bet more money, through percentage fees. Insider trading helps them achieve this by bringing in more money to the platform--they won't kick insider traders off.
Aren't a problem for whom, exactly? I'm not commenting here with concern about the prediction market businesses, founders, or shareholders. I'm concerned for the suckers who are and will continue to be taken advantage of. Forgive me for not abandoning all empathy for those suckers just because they don't realize they're being mugged. These prediction markets are zero-sum, with the connected and resourced taking yet more from those with less.
That's like me complaining about Wall St. tampering with bond ratings on sub-prime mortgages, and you telling me "Don't worry, the banks will be fine." I don't care about the banks, they have enough people looking out for them, and their golden parachutes will catch them on the way down anyway.
Believe me, I am not on their side. Gambling companies are a financial weapon aimed at the working class and a just society would shut them down. I don't blame you for assuming, though, given where we are.