Historical Roots and Accuracy of Prediction Markets

Prediction markets have a long history, dating back to pre-16th century Europe, where bets were placed on papal elections, particularly popular among Italian city-states. According to Ming Pao, despite being banned by the Pope, underground gambling with political implications persisted, offering alternative entertainment from Britain's Tea Act to the Nazi occupation of Europe during World War II. Research indicates that the U.S. election betting market has been remarkably accurate, achieving a 93% accuracy rate over 56 years of elections. Scholars have since discovered that prediction markets can be more precise than opinion polls.