The UK Gambling Commission has outlined how prediction markets would be treated under gambling law in Great Britain, responding to growing interest driven by their rapid expansion in the United States. The clarification addresses questions from operators and stakeholders about whether these products could operate outside existing licensing requirements.
Prediction markets are described as platforms that allow participants to trade contracts based on the outcome of future events, which may include sports, political developments, or financial indicators. While the term has gained traction in the US, the regulator stressed that the concept itself is not unfamiliar within the UK gambling framework.
Classification Under UK Law
The Commission said products meeting the legal definition of gambling must hold a licence, with spread betting regulated by the Financial Conduct Authority. “Subject to the specific business model a ‘prediction market’ operator wished to offer in Great Britain, it would appear current products would fall within the definition of a ‘Betting Intermediary’ under UK legislation,” it stated.
Despite differences in branding, these platforms function like betting exchanges. “Whilst the presentation of prediction markets may differ, their core aspects are akin to what in the UK would be described as a ‘Betting Exchange’,” the Commission said, noting betting exchanges have existed in the UK since 2000.
Regulatory Duties And Enforcement
Licensed operators in Great Britain must comply with detailed requirements covering how gambling products are offered and managed. “Where activities fall within our regulatory remit, licensed operators are subject to a range of requirements on how they provide their products and services,” the Commission said. These obligations include “consumer protection, fairness, the integrity of betting markets, and the prevention of crime”.
The regulator said it actively monitors compliance and intervenes when standards fall short. “We actively scrutinise compliance with these requirements and take enforcement action where standards are not met,” it stated.
The Commission also drew a clear line between gambling services and financial products. Firms offering financial services rather than gambling facilities must be authorised by the Financial Conduct Authority.
Differences With The US Market
The Commission suggested that prediction markets may face weaker commercial incentives in Great Britain due to structural differences with the US. “It is unlikely the commercial drivers for prediction markets are the same here as in the United States,” it said, citing “notable differences between the gambling market in Great Britain and the United States”.
Sports betting in Great Britain operates under a single nationwide framework, while US sports wagering has developed through state-by-state regulation. “Sports betting is established and available across the whole of Great Britain under a single overarching regulatory framework,” the Commission noted.
In the US, prediction markets remain the subject of legal disputes, with some states issuing cease-and-desist orders while others explore taxation and licensing. Illinois and Iowa have recently proposed legislation to restrict or regulate prediction markets, adding to an already fragmented landscape.
The Commission said it will continue monitoring international developments to ensure gambling in Great Britain remains fair, safe, and free from criminal influence.
Source:
“Prediction markets – here’s what you need to know”, gamblingcommission.gov.uk, February 4, 2026
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