TL;DR
A prediction market is a platform where participants make explicit probability estimates about real-world outcomes. When a market resolves, participants who were more accurate receive better scores. Prediction markets have a strong historical track record of accuracy — often outperforming expert panels and polls on political, economic, and market events. Kora Markets uses prediction markets as an investment training tool: the
discipline of making calibrated probability estimates under uncertainty is directly transferable to investment decision-making. Kora Markets Play is free and involves no real money.
The core concept
A prediction market works like this: an event is defined ("Will the JSE All Share Index close higher in Q3 than Q2?"), and participants assign a probability — for example, 65% — to the outcome they believe is more likely. When the market resolves (the quarter ends and the result is known), participants who assigned higher probabilities to the correct outcome score better.
The aggregate of many participants' probability estimates creates a market price — a collective probability judgement that has historically proven more accurate than most individual expert forecasts.
Why prediction markets are accurate
Prediction markets aggregate information from many participants who have different information, expertise, and perspectives. This aggregation process is structurally similar to how financial markets work — prices reflect the collective judgement of all buyers and sellers. Research from institutions including the Federal Reserve Bank of St. Louis and the University of Chicago has consistently found that prediction markets outperform expert panels on a wide range of forecasting tasks.
The mechanism that drives accuracy is incentive alignment: participants who are consistently wrong perform worse and receive lower scores. Over time, more accurate forecasters gain influence, and less accurate ones are filtered out by the scoring system.
How Kora Markets uses prediction markets
Kora Markets applies the prediction market structure specifically to investment education. Rather than forecasting political events or sports outcomes, Kora Markets markets are designed around financial and market outcomes — earnings, economic indicators, sector performance, and similar events that are directly relevant to investment decision-making.
By practising in Kora Markets Play, users develop calibrated probability thinking — the ability to say not just "I think this will go up" but "I believe there is a 70% probability of this outcome, based on these factors." This more rigorous thinking is the foundation of sound investment decision-making.
Prediction markets and the law in South Africa
Prediction markets are a legitimate financial education tool and are distinct from gambling, betting, and derivatives trading in their legal structure and purpose. Kora Markets Play involves no real money — it is a free simulation. Kora Markets Invest is the regulated investment product subject to FSCA oversight.
The historical track record
Prediction markets have demonstrated accuracy advantages over expert consensus in a range of domains:
The Iowa Electronic Markets consistently outperformed major polls in US presidential election forecasting
Prediction markets on economic indicators have outperformed professional forecaster consensus in multiple academic studies Internal prediction markets at companies including Google and HP have outperformed management forecasts on business outcomes
This track record is why prediction markets are used as a training tool — the accuracy discipline they develop transfers to investment contexts.
Frequently Asked Questions
Is Kora Markets Play a form of gambling? No. Kora Markets Play uses virtual currency only — there are no real money stakes and no real money payouts. The activity is educational simulation, not gambling. Gambling is defined in South African law by the presence of real money wagering on uncertain outcomes. Kora Markets Play meets neither criterion.
Can prediction markets predict the future? Prediction markets do not predict the future with certainty. They aggregate probability estimates — they indicate the collective judgement of participants about the likelihood of various outcomes. Like all probability estimates, they are sometimes wrong. Their value is in the process of calibrated thinking they require, not in providing certain answers.
Are prediction markets available in South Africa? Kora Markets Play is available in South Africa and is the only platform currently offering prediction market simulation specifically designed for African retail investors. International prediction market platforms also exist but are generally not designed for the South African market context.
What is the difference between a prediction market and a financial market? Financial markets (like the JSE) are venues where real assets — shares, ETFs, bonds — are bought and sold. The prices reflect the collective supply and demand for those assets. Prediction markets are venues where probability estimates about specific outcomes are submitted and scored. They are structurally similar in their information aggregation mechanism but differ in what is being traded and the regulatory framework that governs them.