The UK Gambling Commission has clarified its stance on prediction markets following increased attention on the sector in the US. Director of Strategy Brad Enright outlined how these products would be treated under British law. The regulator says prediction markets UK would not sit outside existing gambling rules – see more details:

• Prediction markets allow users to trade contracts linked to the outcome of events such as sports, financial indicators or political results. While the label is relatively new, the Commission said the mechanics closely resemble betting exchanges. Similar exchange-style betting products have operated in the UK since 2000.

• Under UK legislation, products that meet the definition of gambling must be licensed by the Gambling Commission. The regulator said prediction markets UK would likely fall within the definition of a betting intermediary. Spread betting remains the main exception, as it is regulated by the Financial Conduct Authority.

• Licensed operators are required to meet standards on consumer protection, fairness and the integrity of betting markets. They must also comply with rules designed to prevent crime and protect customers. The Commission said it actively monitors compliance and takes enforcement action when standards are breached.

• The regulator warned that unlicensed prediction market operators should not target or transact with consumers in Great Britain. Operating without the appropriate licence may constitute a criminal offence. Enright said, “We do not believe they would be able to classify themselves as non-gambling products.”

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