What do you mean here by front run? Don't most of these exchanges use normal limit books with visible resting orders available to trade against?

My understanding was that these shops were acting more as market makers, with the idea of guaranteeing liquidity and tight spreads in some number of markets.

If you think the listed bid-ask spread is mispriced you're more than welcome to move the market to whatever price you think is more appropriate.

Yes they act as MMs. There's only so much edge they can get in prediction markets from their money skills alone.