Gnosis allows you to create arbitrary events to make predictions on any information.A prediction market utilizes user predictions to aggregate information about future events. Users in the market trade tokens that represent the outcome of a certain event. Because some outcomes are more likely to occur than others, these tokens end up having different values in the open market.
As the time passes or related events unfold, some token outcomes may be more likely to happen thus increasing their value. Once the event occurs, the tokens representing the final outcome receive full value while the rest of the tokens become worth nothing.