The provocative emergence of prediction markets

Is it an insurance? No. Is it just a bet at the bookmaker’s? No. It’s a prediction-markets position. Wow.
Under calls for tightened regulation, new ways of running liquid books in real time are supporting … ok, let's call it bets after all … on real-life outcomes. Beside moral and regulatory implications, post-trade pros at clearinghouses, custodians and elsewhere, face the question of how they should be valued, and their (often binary) risk profiles assessed.What’s in these markets when we look at them as a new financial-services niche, as a new type of securities to safekeep and service, or as another headache for our processing and compliance units?