Which model involves individuals betting against each other rather than a centralized bookmaker?

• A. Gambling
• B. Prediction market
• C. Peer-to-peer betting
• D. Wager

Answer: (C)

Peer-to-peer betting is when bets are matched directly between individuals through a platform, with no single bookmaker setting the odds. Bets are proposed by one person and accepted by another, so the market itself determines the prices based on supply and demand. This creates a direct counterparty dynamic—each bettor is betting against someone else rather than against the house. Traditional gambling, in contrast, involves a centralized bookmaker who quotes odds and takes the bet as the house. Prediction markets also involve people trading on outcomes, but they’re usually framed as forecasting tools with contract prices reflecting collective beliefs, rather than two parties directly wagering against each other.