Prediction markets have taken the US by storm over the past couple of years, and platforms like Polymarket and Kalshi have been looking at markets further afield to see if they can continue their impressive growth. However, the Gambling Act 2005 is an obstacle that they’re running into while trying to find their feet in the UK.
These prediction markets let users buy yes and no contracts on the outcome of real-world events, such as who wins an election or when a war might start. The live prices are treated as a crowd-sourced probability.
Polymarket and Kalshi are now rivalling traditional sportsbooks in the US, with their monthly trading volume being in the tens of billions as of 2026.
There’s a lot of debate in the US about who regulates these prediction market platforms, with state gambling regulators believing they do, while the operators say that they offer financial products and therefore fall under the CFTC financial regulator’s oversight. In the eyes of the UK Gambling Commission, prediction markets are most certainly a type of bet.
The Regulator’s Verdict
The UKGC, which regulates the likes of bookies and online casinos providing games like megaways slots, blackjack, and roulette, set out its position on prediction markets in a February 2026 blog post.
Its core message was that any commercial product that meets the legal definition of gambling in the UK must be regulated and licensed by the UKGC and that current prediction market models fit that definition.
The argument was that these platforms look very similar to betting exchanges like Betfair Exchange and Matchbook. These platforms also allow people to bet against one another on uncertain future events.
As a result of this interpretation, prediction market operators would likely need a betting intermediary licence. That means the framework to regulate prediction markets already exists and there doesn’t need to be a new one built.
The UKGC doesn’t believe that the platforms should get away with trying to classify their products as non-gambling. It also warned platforms not to target UK customers or accept business from them, as operating without the correct licence is a criminal offence.
The government follows a similar view to the regulator. In a written parliamentary answer, also in February 2026, Gambling Minister Baroness Twycross confirmed that a betting intermediary licence was necessary from the UKGC.
The FCA’s Position
The Financial Conduct Authority (FCA), which polices the financial services businesses in the country, has its own history with these products. It has permanently banned firms acting in the UK from selling, marketing, or distributing binary options to retail customers since April 2019. Prediction market contracts are based on paying out for a yes or no outcome, so they closely resemble a binary option.
The FCA published a report in March 2026 where it stated that prediction markets referencing non-financial events like sports or political outcomes are under the UKGC’s remit. It said that those referencing financial or certain climatic events fall within the FCA’s remit.
Its current view is that the financial prediction market products are binary options and fall under the retail ban. The FCA would consider whether future work on access to these products or clarification of the rules would be necessary.
Therefore, between the two UK regulators, there’s not much room for the US-style platforms to serve British retail customers.
Polymarket Geoblocks Britain
The regulatory position is why Polymarket isn’t visible to UK customers. It blocks UK IP addresses at the platform level. No UK-regulated exchange, intermediary, or payment processor can lawfully route British retail customers into Polymarket’s contracts.
Polymarket has run afoul of the US authorities in the past, but it’s been trying to rebuild its position in the country. It was able to return to the market by acquiring a licensed exchange, QCX, in November 2025.
Controversies With Prediction Markets
One of the reasons for prediction market regulators being especially cautious about prediction market platforms is due to several high-profile events that exposed the possible darker edges of event trading.
One of the standout incidents involved George Cottrell, a financier and aide to Nigel Farage. The Financial Telegraph obtained trading data with an account bearing his name and birth year, which netted about $655,000 on Polymarket betting on the timing of US strikes on Iran in late February 2026.
There were further bets on Keir Starmer no longer being the Prime Minister by the end of that month, and a highly profitable bet on Donald Trump winning the 2024 presidential election.
The war-related markets are those that came in for the most criticism. Betting on when the US might strike Iran and whether the Iranian leader would be removed from power attracted hundreds of millions of dollars in volume.
US lawmakers condemned these “death markets,” and blockchain analysts regularly flag brand-new accounts that place unusually well-timed, profitable bets in the hours leading up to military operations. This has continually raised insider trading suspicions that the industry hasn’t yet fully answered.
A Hardening Line Across Europe
Britain is not the only country in the region that’s moving against prediction markets. Nine gambling authorities in June 2026, including those in France, Germany, Italy, the Netherlands, Spain, and Switzerland, announced coordinated action against unlicensed prediction market platforms, timed at the beginning of the FIFA World Cup.
France’s ANJ has also ordered internet providers to block Polymarket, citing addiction and market integrity risks and referring possible data manipulation to prosecutors. Italy, Romania, and Portugal have introduced similar blocks.
The landscape isn’t entirely hostile, with Gibraltar, a small British Overseas Territory, having been specific to create a clear regulatory regime for prediction markets outside of ordinary gambling law.
The message in mainland Great Britain is that prediction markets are most certainly a form of gambling, with platforms needing a betting intermediary licence. Unlicensed operators are warned to stay away from targeting UK customers or they’ll face criminal action.
Lawmakers across the UK will be watching closely to see how the sector’s influence develops and what’s seen as an almost inevitable Supreme Court case in the US to decide once and for all whether prediction markets are a form of gambling or a financial instrument.
