There is no way to remove the incentive for people with the ability to alter the events being bet on. Insider trading is generally considered a bad thing for the stock market because of the non symmetrical information for everyone trading but all of sudden in the past few years a cohort of people(rationalists) have found it virtuous
It just happens to almost always be the case that the bad greatly outweighs the good, and it usually just leads to things like brazen war profiteering (+ plan-leaking that jeopardizes operations, in the event the military operations were perhaps for a morally net good cause).
Before any of their defenders(and I’m including e/acc and most of TESCREAL in this criticism) come at me about how much introspection they do and how they constantly try to question their theories or be LessWrong you’ll have to explain things like prediction markets, Bankman-Fried, or the litany of other warped ideas coming out of this group that are causing harm to society.
An insider doesn’t make their bets known until they are certain they can take advantage of it. The whole point of the move is to predate on the rubes.
In all the cases of insider trading I have been aware of, I have never once heard this argument, until that interview with a prediction market CEO.
The whole point of insider trading is to ensure an unfair trade. The moment you enshrine unfairness as a core tenet of your market place, it loses price discovery capability, ensuring that the surplus is captured by manipulation not performance.
When you have shit like will the government attack X nation by 9:00 pm on Friday, it takes very little for the insiders with levers to decide if the event in question is going to happen, to make the event happen.
It’s beyond even regular corporate insider trading which was usually predicated on secret information, not the literal ability to decide if an event occurs.