Stocks are backed by something real (in general). There's a business. That business can't just manufacture new stock out of thin air without going through a regulatory process to do so and the total number of shares is publicly known.

Furthermore the institutions that allow you to trade mostly aren't taking positions on the stock price and in theory there are jail-time consequences if they cheat. In practice that isn't always the case but at least there is some limit to what they can do to screw over their customers.

These contract markets have absolutely none of that. If they decide to take up positions to stuff their own pockets you probably wouldn't even know it and it wouldn't be illegal either. They can make up contracts for anything and everything without limit. If they aren't front-running their own customers then they're idiots because that's free money. And they can just lie about the odds as they like so if bets aren't going the way they want just tip the scales.

Oh and they have absolute control over whether any event counts as success or not and how to handle edge cases. There's no one you can appeal to.

Maybe they operate above-board in all aspects. Maybe they don't. No one really knows.