The traditional espoused financial market purpose of these prediction markets is based on the premise that actors on it will have inside information.

The point is for business with vested interests (and therefore often inside information) to use these markets to hedge for things that will materially affect their profitability.

For example, in this case, suppose you ran a company that was shipping goods through the Middle East, and a war would disrupt your business. You would then place bets on there being a war, so that if it does happen you will recover some of your losses. You might know inside information because your work in the region, but that is expected.