UK Regulator Clarifies Prediction Markets Fall Under Gambling Legislation
UK Gambling Commission Defines Regulation for Prediction Markets
The UK Gambling Commission (UKGC) has clarified its approach to prediction market platforms potentially entering the British market. Contrary to viewing these platforms as financial instruments, the regulator considers them gambling services subject to UK gambling laws.
Prediction Markets to Require UK Gambling Licenses
Brad Enright, the Director of Strategy at the UKGC, addressed the rising popularity of prediction markets, especially noted in the United States. These platforms allow users to trade contracts based on outcomes ranging from sporting events and elections to economic indicators.
According to the UKGC, any commercial service that fits the definition of gambling under UK law must obtain a license and operate under the commission’s supervision. Although some international operators position their services as akin to financial trading, the UKGC views current prediction market models as betting intermediaries akin to betting exchanges, which have a longstanding legal presence in the UK.
The only exception identified is spread betting, which falls under the regulatory scope of the Financial Conduct Authority (FCA) rather than gambling legislation. Aside from this, platforms providing contracts linked to specific events must secure the appropriate gambling licenses.
Licensed operators in the UK are obligated to meet stringent standards designed to protect consumers, maintain fairness, ensure the integrity of betting markets, and prevent criminal activity. The UKGC actively monitors compliance and enforces regulations by taking action against breaches.
Warnings Issued to Unlicensed Prediction Market Operators
The UKGC has warned that any prediction market companies operating without a UK license must refrain from targeting or accepting bettors from Great Britain, as doing so would be unlawful. Such unauthorized activities may also jeopardize any other gambling licenses held by those companies.
While the UKGC did not comment on ongoing legal disputes in the United States, where prediction markets face regulatory challenges between state and federal authorities, it highlighted major differences between the UK and US betting landscapes. The UK’s sports betting industry benefits from a unified national regulatory framework and a long history of legal operation.
By contrast, the US betting market has expanded rapidly in recent years but remains fragmented across states with varying regulations. This regulatory environment possibly explains why prediction markets have gained more traction in the US compared to the UK.
