Prediction markets are one of the hottest areas of the financial markets right now. In the US, platforms such as Polymarket and Kalshi are attracting record numbers of users. But can you trade prediction markets in the UK? Let’s take a look at the landscape.
What are prediction markets?
Prediction markets allow traders to bet on the outcomes of future events. Via prediction markets platforms like Polymarket and Kalshi, traders can express their views on election results, sports results, economic data releases, potential geopolitical developments, and more.
Prediction markets use a simple ‘binary option’ model. This means that the outcome is all-or-nothing: the contract either pays out in full, or it expires worthless.
The price of a bet is related to the estimated probability of the outcome playing out. For example, if a ‘Yes’ bet for a Yes or No question costs $0.65, the market believes that there is a 65% chance of the Yes bet being successful.
Are prediction markets available in the UK?
In 2019, the Financial Conduct Authority (FCA) introduced a ban on the sale of binary options to retail consumers. At the time, the regulator said: “Binary options are gambling products dressed up as financial instruments. By confirming our ban today we are ensuring that investors don’t lose money from an inherently flawed product.”
As a result of this ban, major prediction markets companies like Polymarket and Kalshi are not allowed to operate in the UK at present. Their websites are accessible, however, it’s not possible to open an account and place a trade in the UK.
The Gambling Commission said today that “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.”
Whilst this is not openly “anti” prediction markets, but it clearly views them as gambling products that must be licensed like betting exchanges.
Its stance is cautious and enforcement-focused, warning unlicensed operators not to target UK consumers.
Alternatives to prediction markets in the UK
The good news for those in the UK who are interested in trading prediction markets is that there are a few similar products that are either accessible today or coming soon. These include:
- Spreadex Sports – As well as offering financial spread betting, Spreadex also offers spread betting on sports, where you buy and sell markets in the same way as you do with stock market options. Since 1999 for sports and political events, Spreadex Sports will quote a buy and sell price, which will either settle at 0 or 50 to 100, depending on the market.
- Betfair – Via Betfair, it’s possible to bet on a range of events including political events, sports, and special bets (e.g. Eurovision). Its platform operates on the exact same structural principles as popular US prediction market platforms like Polymarket and Kalshi. However, with Betfair, you can’t bet on financial markets. In the past it offered a related service for financial betting called Tradefair, but this has been retired due to regulatory costs.
- Smarkets – Via Smarkets, you can bet on a range of events including sports, news, and politics. Smarkets is licensed and regulated in Great Britain by the Gambling Commission so that’s how it gets around the FCA ban on binary options. Like Betfair though, it does not offer access to financial bets.
- Matchbook – Matchbook, which is also regulated by the UK’s Gambling Commission, is currently working on a prediction markets platform for the UK. This is expected to be available in 2026. Matchbook also plans to license its prediction markets technology to other firms. This could see a range of other companies start to offer similar products.
Trading binary options in the UK as a professional trader
It’s worth noting that it’s possible to trade binary options in the UK as a professional trader. One platform that offers binary options to professional traders is IG. It has a service called Digital 100s. This allows you to speculate on the likelihood of a market event taking place.
However, to be classified as a professional trader with IG, you need to meet two of the following three criteria:
- You have worked in the financial sector in a professional position (which requires knowledge of CFDs or spread betting) for at least one year.
- You have a ‘financial instrument portfolio’ (defined as cash deposits and financial instruments) of €500,000 or more.
- You have placed 40 trades of significant size in the last year. Significant size is £10,000 notional for equity trades and £50,000 for everything else.
In summary, major prediction markets operators like Polymarket and Kalshi are not operating in the UK today. This is due to an FCA regulatory ban on binary options for retail traders. However, there are a range of platforms that offer similar products. These include Smarkets, Betfair, and Spreadex Sports.
Based in London, Edward is a distinguished investment writer with an extensive client portfolio comprising a diverse array of prominent financial services firms across the globe. With over 15 years of hands-on experience in private wealth management and institutional asset management, both in the UK and Australia, he possesses a profound understanding of the finance industry.
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