There are other kinds of prediction systems that don't use markets. One researcher developed a system that just recruited a bunch of random people and took the predictions of those with the best historical track record. And found it was much better than chance or predictions by CIA analysts with a lot more information and knowledge.

Others have found that markets can work almost as well with just play money. It's just a game with no real stakes, but the wisdom of crowds and competitive human nature still makes it work. It's much much harder to manipulate though, because you can't spend real money to buy predictions. You can only get play money by organically earning it over a long period of time making actually good predictions.

I don't think real prediction markets are as bad as you think though. Especially if all bets must be public. Then manipulation and conflicts of interest are easily detectable. And you can earn money by betting against them. People would quickly make bots that just bets against new accounts betting lots of money, or inverts the trades of people with historically worse than chance track records. People will develop meta models that make bets based on the trades of other predictors. And come up with crazy machine learning systems to detect manipulation.

If that somehow doesn't work, the best system might be a combination. E.g. have a group of predictors who make the final decision, but have access to the results of a prediction market. And can decide when to trust it and when not to.

Of course that shouldn't be necessary. Because if there is anyone that can tell better than chance when the market is wrong, they could just make tons of money betting on the market itself. And in the process correct the error.