Ignoring the gamblers losing money because they lack insider information, the harm is that you changed the incentive for war. It is motivated by money for the gamblers, not military or political objectives. The difference between this and rigged sports gambling is that people die. They die on a whim and they die unnecessarily. I shouldn’t have to explain why people dying is bad.

pros:

- its fun for some people

- we can maybe get some limited information about the likelihood of events through a combination of wisdom of crowds and insider trading

cons:

- gambling addiction ruins lives, beyond a shadow of a doubt. People (often people with financial interest) like to argue this point, but I don't have space to write

- insiders essentially steal money from people betting based on other information. You might argue that those other people should have known. But why bet at all? its irrational. Yet people do it regardless, and they still don't deserve to have their things stolen. Poker where another player can see your cards is a stupid game.

- it clearly, unambiguously signals corruption to all and sundry. Connections let you get rich at the expense of others. Some people might not care as much but I truly think this is the biggest con of them all. Why behave the way we would all wish leaders would, if you have proof other leaders are making it big with no consequences. How would you not feel like a fool, for your morals? We should be making it as easy as possible to do the right thing that benefits all.

- it incentivises terrible behavior. Betting that a war won't happen, or a person won't die, or that there won't be an explosion at a crowded area in downtown x city at y time, is essentially the same as putting a bounty out for somebody to do it. They can bet that it will happen, and then go and make it so, and collect your reward money.

It's a rigged game. If there's a bet that player X will foul player Y, without proper safeguards, player X can bet on himself and then intentionally player player Y. The actual harm is that by the rules of the betting, no one should know the outcome who could also bet on the game, so the losers are being robbed of their money.

In this particular context, it's also possible that there are illicit transfers of money without being immediately noticeable. Bribery could happen at the highest levels with it being very difficult to trace and prosecute.

Like any insider trading you are transferring money from the public to yourself. More interestingly for the prediction market angle: you are leaking secret information by doing that. If you make big trades in anticipation of specific events other market participants can see it. That could be extremely serious if say it endangers a military operation.

If an insider, say a member of the Department of Defense (or War, duh) bets a certain date: they could internally influence the decision to execute on that date rather than possibly a better (earlier?) date that could yield less damage or loss to either side.

Both https://en.wikipedia.org/wiki/Conflict_of_interest and https://en.wikipedia.org/wiki/Insider_trading when people able to influence outcomes are able to bet on those outcomes.

If I were a competent adversary like Iran i would constantly float bets against an US attack and the moment somebody bites, I alarm the air defenses.

It’s more a sign of corrupt and morally bankrupt leadership, which should be alarming enough by itself.

Corruption, especially blatant corruption like this undermines credibility in institutions.

The fact we’re talking about this is a testament to the low standard of integrity and and morality we carry as a whole.

To me it looks like this:

If you are not an insider with special info and special access, no matter what you do in the market, you eventually lose to the insiders. So, if you blur the details a bit, you're just giving your money to these people.

The rational move would be to just not participate in a market where insider trading happens. I don't really understand why people aren't avoiding these markets like the plague.

Insiders fleecing dumb people. Then dumb people get pissed their finances are destroyed and they'll never pay off their debt or support a family or attract a mate, and so they go down a rabbit hole of insanity and depression on social media, getting conned by influencers and AI slop and then vote for whatever the rage du jour some grifter politician is selling, or worse they shoot up a school...

2026, yeah baby!