The UK Gambling Commission (UKGC) has issued a clear warning on the status of prediction markets, stating that such products would likely fall under gambling regulation if offered in Great Britain and could not operate outside the existing licensing framework.
In a statement addressing growing interest in prediction markets, particularly following their rapid expansion in the United States, the regulator said the emergence of these platforms has prompted enquiries about how they would be treated under UK law.
“The emergence of ‘prediction markets’ is a notable development in the United States,” the Commission said. Prediction markets could grow into a $1 trillion industry in the US, according to a recent report from Eilers & Krejcik Gaming. “As a result, we have fielded enquiries about how they impact gambling regulation in Great Britain.”
Prediction markets are platforms that allow users to trade contracts based on the outcome of future events, including sports, political and financial markets. While the presentation of these products may differ from traditional sportsbooks, the UK regulator made it clear that form does not override substance when assessing regulatory status.
Betting exchange rules would apply
Under UK legislation, any commercial product that meets the definition of gambling must be licensed and regulated by the Gambling Commission, with the exception of spread betting, which falls under the remit of the Financial Conduct Authority (FCA).
“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,” the Commission said.
The regulator added that despite differences in branding or user experience, prediction markets closely resemble betting exchanges as they already exist in the UK.
“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’,” it said, noting that “the betting intermediary gambling licence exists to cover such business models”.
The Commission also emphasised that betting exchanges are not a new concept in the UK market. “Whilst prediction markets are a relatively new development in the United States, betting exchanges have existed in the UK since 2000,” it said.
Consumer protection and enforcement
The UKGC stressed that licensed operators are subject to strict regulatory obligations designed to protect consumers and ensure market integrity.
“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 include “consumer protection, fairness, the integrity of betting markets, and the prevention of crime”.
The regulator added that it is actively monitoring compliance and would not hesitate to act when standards are breached. “We actively scrutinise compliance with these requirements and take enforcement action where standards are not met,” it said.
Warning to unlicensed operators
The Commission also issued a direct warning to prediction market operators currently operating outside the UK licensing regime. “If a prediction market operator was to launch here in Great Britain, we do not believe they would be able to classify themselves as non-gambling products,” it said.
Blog: Prediction markets – here’s what you need to know. Director of Strategy Brad Enright sets out the Gambling Commission’s view on prediction markets and their availability in Great Britain. https://t.co/3Oj5z0KwTB via @GamRegGB
— Janne Nikkinen (@DocNikkinen) February 4, 2026
Operators without a UK licence were urged to ensure they are not engaging with British consumers. “Current prediction market operators who are not licensed in Great Britain should take steps to ensure they are not targeting or transacting with consumers in Great Britain,” the Commission said, adding that “there are criminal offences associated with operating without an appropriate licence here”.
Structural differences limit UK appeal
The regulator suggested that prediction markets may face limited commercial incentive in Great Britain due to the maturity of the UK betting market. “It is unlikely the commercial drivers for prediction markets are the same here as in the United States,” the Commission said, pointing to “notable differences between the gambling market in Great Britain and the United States”.
While US sports betting has expanded through state-by-state legalisation, the UK operates under a single national regulatory framework. “Sports betting is established and available across the whole of Great Britain under a single overarching regulatory framework,” the Commission noted.
State of prediction markets in the US
US States are currently locked in a jurisdictional tug-of-war with federal regulators over whether prediction markets constitute financial innovation or illegal gambling. While the CFTC has recently moved to embrace these platforms as regulated derivatives, states like Nevada, Massachusetts, and Tennessee have issued restraining orders and cease-and-desist letters to block operations they view as unlicensed wagering.
Conversely, states such as Illinois and Iowa are attempting to monetise the trend through heavy taxation and high permit fees, creating a fragmented legal landscape where a user’s ability to trade often depends entirely on their specific zip code.
Illinois has most recently joined a list of states trying to regulate and tax prediction markets. Illinois has introduced legislation that would significantly restrict prediction markets, including banning them on sporting events, as reported by Gaming attorney Daniel Wallach. The proposal is modeled on New York’s ORACLE bill. Iowa also recently introduced Senate File 2085, a proposal that would impose new regulatory and tax requirements on prediction markets operating in the state.
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