It's in the name: Prediction market. The point is to predict an outcome, insiders will naturally be better at that than non-insiders.

Though I think where things start to get a bit more insidious is when the "insiders" have access not merely to inside information, but the ability to change the outcome. That type of insider trading should be banned IMO because it works against the purpose of prediction markets as a tool. (Though the extent to which banning that is possible is debatable.)

I think GP is saying it's not the prediction market that's bad, but human nature itself. The prediction market just makes it more visible.

Yeah maybe if you phrased it as "Which card(s) must you turn over in order to ensure that all odd-numbered cards are blue?" you'd get a better response?