Prediction markets: buy, sell, hold?

Saying that widespread adoption of prediction markets by U.S. corporations has been slowed because of their uncertain legal nature, Justin Wolfers points out that the issue has recently drawn the attention of the Commodity Futures Trading Commission. Are

prediction markets legitimate business tools, an alternative set of securities markets requiring SEC regulation, illegal betting markets, allowable games of skill, or something else altogether?

Slate asks a pertinent question.


Wikipedia: prediction markets