So who decides, and how? The most straightforward answer would be something like: The prediction market is a regulated financial exchange with a lot of lawyers. The prediction market appoints a committee of lawyers and philosophers to decide whether events have occurred.7 They try to do a good job. If they do a bad job, the prediction market loses customers, or regulators step in. The committee evolves a code of ethics: Committee members aren’t allowed to trade themselves, or take bribes, etc. The committee evolves a set of rules to make the substantive decisions. Each time some event contract has a difficult and controversial determination, the committee changes the rules for future event contracts to make the resolution easier and less controversial.

https://www.bloomberg.com/opinion/newsletters/2026-04-13/prediction-market-making-is-hard