What are prediction markets?

Prediction markets are marketplaces where people trade on the outcomes of future events. Market prices can indicate what the marketplace believes the probability of the event is. For example, “who will win in a sporting event?" For this sporting event there will be two tokens, one for each team. If the price of token A is higher than token B, it means that the market believes team A has a higher chance of winning.
What are prediction markets?
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