Execution, not accuracy, drives profits

A decomposition of 222 million prediction‑market trades finds returns split into a directional (forecast) component and an execution (price) component; traders who are often right still lose money because they pay worse prices, while near‑random traders profit by securing better execution. Automated traders earn a persistent execution edge (about 2.52 cents per contract) that explains the profit gap. — This reframes how we interpret prediction markets: accuracy in forecasts does not guarantee financial reward, concentrating profits with automation and raising questions about access, market design, and the use of markets as public‑interest forecasting tools.