You could argue that certain prediction markets are better than the alternative. Maybe not for this, but take sports betting.
People taking sides against each other means the losers and winners are individuals.
Meanwhile sports betting is growing but the winners are “the house”, the companies.
The problem with prediction markets is not who wins, its the incentives that lead to who wins.
Well right, so like I said, in sports that’s a good thing
Even in sports it's not a good thing, but the consequences tend to be limited only to game outcomes. Nobody wants teams throwing matches because their players bet on the loss, but that's nothing compared to government actions being influenced by prediction-market bets.
Parimutuel betting is a thing, especially in horse racing. There's no reason that it couldn't be played in place of fixed odds betting except that it seems that the consumers don't want it.