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UK prediction markets, insider information, and the law

Horse racing enthusiasts gather around the on-course bookmakers as they place bets on Ladies Day at the Cheltenham Festival 2012 on March 14, 2012 in Cheltenham, England.
Photo: Matt Cardy/Getty Images

A discussion on whether placing a bet on inside information constitutes “cheating” and the related issue of market manipulation.

Assume prediction markets are coming to the UK. Assume some will fall under the Gambling Act. Assume some users have “inside information” and make bets using this inside information what happens?

Betting, like financial markets, assumes (implicitly or explicitly) broadly equal terms for users. If one bettor has private information