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Prediction Bank: A way around current prediction market regulations?

This is a good effort, but I'm not sure if the return would be worth it. You said stock market in a different comment -- yes, it returns 8% annually, on average, but what happens when it returns -10%? You're subjecting the forecaster's to investment risk, whereas what you want to do is subject them only to the forecasting risk (and compensate them appropriately).