We also care about the world outside the prediction markets. If decision-makers have an incentive to "throw the match" by making surprising decisions, that will impair the decision-making, which will affect the rest of us. Likewise, sufficiently-wealthy actors will be able to manipulate the behaviour of officials by betting against the behaviour they want to see, much like an assassination market.
> manipulate the behaviour of officials by betting against
Right, it becomes regular bribery with middleman and a funny hat.
"I didn't pay the judge to dismiss the case against me, I just hedged by betting I'd be convicted and he just happened to be betting I'd go free, and now my money is coincidentally in his pocket.