been trying to wrap my head around:

1) does it matter that someone bets on the underdog because the potential payout is outsized, not because they believe they’ll win?

2) how is a "prediction market" different from sports betting? isn’t it just a fancy term to describe the same thing wrt other aspects of society?

Great questions! Have been thinking about these two myself for some time
Have done 1 few times

Thought on 2 is that it isn't?
Except the vibe/view shift that the markets are a great source of information themselves

Good questions. To me, wrt question 2, a thin line separates the two concepts.

1) Matter in what sense? The promise of PMs is many different people with knowledge put skin in the game and contribute to price. Price is a piece of information that reflects sentiment. PMs don’t “predict” outcomes they reflect current sentiment

2) Most sports betting is binary. You win or lose. PMs are scalar

Searchcaster