Legalize gambling, but only on things socially desirable for people to care about and predict well: not games or slot machines.
The weather and other acts of God are a fairly obvious example.
Unfortunately, many of the things people care about are people. Many problems: adverse selection, moral hazard, imperfect information, incentives for manipulation.
Will a medical treatment work on a particular person? We assume the person has opened his or her medical history. It's socially desirable for better predictors to be developed, but gambling suddenly means that there are people with financial incentive to make sure the person does NOT get better.
How effective will a certain educational program be on a particular person? Once again, a better predictor can greatly benefit education, but gambling necessarily will have people trying to impede the success of that person.
Will the LHC discover the Higgs Boson? Developing a good predictor both advances particle physics and might prevent wasting money on a device that won't find it. But gambling introduces the incentive for sabotage.
Will tolls from this bridge cover the cost of construction? Being able to predict the benefit of large public infrastructure projects is of course useful for planning future ones. But again, those betting "no" have incentive to discourage people from using the bridge, perhaps even sabotage.
Some of the problems might be lessened if we forbid anonymous gambling.
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