Jonah Goldberg thinks so:
I am always at a loss about how much, if at all, I should care about this information. From what I can tell, the “prices” for shares in political candidates have been all over the place over the last year. So how predictive are they, really? It seems to me they don’t really measure the likelihood of anything so much as the prevalence of certain aspects of conventional wisdom. It’s a clever way to poll people in a given moment, not some ingenious new mechanism for gleaning the future.
Rachel Weiner made the case for the prediction market a few months ago:
The site’s collective wisdom tends to be more reliable than than the cadre of professional pundits when it comes to forecasting election reults. In 2008, bettors got only two states wrong — Indiana and Missouri. Bettors thought Indiana would go Republican and Missouri would go Democratic. Neither prediction was right. Those two states canceled each other out, however, keeping the site very close to the actual electoral college total. In 2004, the site got every state right. Bettors tend to follow polls closely, and polls (when appropriately screened for bias or poor methodology) tend to be pretty accurate in the aggregate. Pundits have personal biases — affection for particular campaign consultants, a desire to not follow the pack — that Intrade bettors don’t.