The United Kingdom Gambling Commission (UKGC), the leading authority for regulating gambling within the British isles, has confirmed prediction markets would fall under their purview if they were
At present, US-style real-money prediction markets such as Kalshi and Polymarket are not generally available to retail users in the United Kingdom because the financial regulator has banned binary-option products.
UKGC director of strategy outlines authority’s position on new betting trend
In a blog for the UKGC posted on 4 February, Director of Strategy Brad Enright, said that any commercial product that falls within the legal definition of gambling under UK law must be licensed and overseen by the regulator.
He writes: “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 betting intermediary gambling licence exists to cover such business models,
“Whilst prediction markets are a relatively new development in the United States, betting exchanges have existed in the UK since 2000.”
He added that companies that provide financial services products, rather than gambling facilities, are authorized and regulated by the Financial Conduct Authority (FCA).
Prediction Markets Gain Traction in the U.S.
Prediction markets have transitioned from niche curiosities to mainstream trading arenas in the United States, drawing growing interest from both retail users and institutional investors.
Platforms such as Kalshi and Polymarket collectively handled tens of billions of dollars worth of event contracts in 2025, with some industry estimates suggesting more than $37 billion in total predictions placed on these markets last year.
Weekly trading volumes have repeatedly hit multi-billion-dollar records, with data tracking shows combined notional trading across major platforms topping approximately $5.2 billion in a single week in early January 2026.
Activity peaks around major sporting and political events, and increased regulatory clarity, including U.S. Commodity Futures Trading Commission (CFTC) rulings, has enabled broader participation and product expansion.
While still far smaller than traditional equities or crypto markets, the rapid growth in volume and liquidity underscores how prediction markets are evolving into a significant segment of the broader event-trading ecosystem. Analysts say their rise reflects both speculative demand and a desire among traders for real-time probability pricing on economic, political and sports outcomes.
Prediction markets running into legal issues at state level in U.S
Despite backing from the U.S. Commodity Futures Trading Commission (CFTC) as federally regulated derivatives platforms, prediction markets have repeatedly run into legal friction at the state level.
Several states have taken enforcement actions or won court rulings asserting that prediction-market sports contracts amount to unlicensed gambling, even though operators maintain they fall under federal oversight. For example, a Massachusetts judge issued a preliminary injunction blocking Kalshi from offering sports event markets absent compliance with state gaming laws, effectively forcing geofencing for contracts in that state.
Regulators in Nevada have also escalated enforcement, with the state’s Gaming Control Board filing civil actions against platforms like Polymarket and Coinbase over allegedly unlicensed wagering on sports event outcomes, while Coinbase has responded by suing multiple states to assert that federally regulated prediction markets preempt state gambling restrictions.
These actions reflect a broader, unsettled legal landscape: although the CFTC has signaled its intent to clarify and affirm federal jurisdiction over “event contracts” and to withdraw earlier advisories cautioning operators about state challenges, conflicting court decisions and state enforcement actions continue to create uncertainty about how prediction markets may operate across the U.S. in the absence of clear legislative settlement.
