The huge amount of money that goes into predicting winners in the elections is capable of turning healthy political system into extremely dangerous one for the manipulation of figures. Secrets from high places usually reach the ears of rich people who make profits even before the policies are publicly declared officially. While there is no definite separation between the state policy makers and the gamblers in the business, public involvement would definitely lead to losses. The trust of the public on the integrity of the democratic process is gradually being undermined by the selfish interests of the few individuals who manipulate the market sentiments for their own gains. It is therefore very important that strict protective measures are put in place.
If you look at the pattern of Polymarket and how events are predicted, you will know when an entity is making decision of the outcome. You will see a single account deposit millions and buy the shares of an event, people see this and rush to follow it and after sometime, the result goes to the side of people that first makes deposit. This alone has tempered with the reputation of the system, if you now include election into it, the result will be game over.
As far as election is concerned, there will be money around each party that are contesting, there will be people that want to push money to predict the outcome. It may not even be a favour of who is winning, people can do anything to make money.