Lawyers sell uncertainty. Prediction markets quantify it.

The difference matters more than it seems.

I was skeptical about this for a long time. It felt like a tool for elections and sports, not for business.

One specific moment changed my mind. Probability on a regulatory outcome shifted sharply overnight, and the news only came out two days later. The market knew something first. Not insider information, just an aggregate of people with real money on the line.

Since then I've been thinking about this as a tool in the risk process.

It's not a replacement for lawyers, they see details the market doesn't. But as an input for scenario planning it's more interesting than gut feeling. A number with a clear mechanism beats another memo about uncertainty. Polymarket is the most obvious place to start, though it's far from perfect.

The problem I see.... liquidity on regulatory markets is still low. Price moves from small positions, the signal is noisy. I'm not sure how well this scales as a tool or whether it only works when you already know how to read the context around the price.

The hypothesis is there, the conviction isn't. Has anyone thought about this seriously?