The global rise of prediction markets is creating new challenges for gambling harm prevention and treatment programmes, particularly in the United Kingdom, according to an analysis by SBC News Editor Ted Orme-Claye. The piece highlights how the expansion of these platforms, which allow users to bet on outcomes of events ranging from elections to weather, could undermine the progress made by the UK betting industry in addressing problem gambling.
Prediction markets, often operating in a regulatory grey area, have grown significantly in recent years, attracting a user base that overlaps with traditional sports betting and casino gambling. Unlike conventional betting, prediction markets are sometimes framed as financial instruments or information markets, which can exempt them from gambling regulations. This regulatory ambiguity poses a risk to harm reduction efforts, as users may not be subject to the same safeguards—such as deposit limits, self-exclusion tools, or advertising restrictions—that apply to licensed gambling operators in the UK.
The UK betting industry has placed a much heavier emphasis on responsible gambling in recent years, driven by a combination of industry responsibility, regulatory pressure, and public demand. Operators have implemented measures such as affordability checks, time-out features, and enhanced customer support for those showing signs of harmful play. However, the rise of prediction markets could divert spending away from regulated channels, potentially increasing the risk of unmonitored gambling behaviour.
Orme-Claye notes that the problem is not limited to the UK. Prediction markets are gaining traction globally, with platforms like Polymarket and Kalshi attracting significant volumes. In the United States, the Commodity Futures Trading Commission (CFTC) has taken a cautious stance, but enforcement has been uneven. The lack of a coordinated international response means that prediction markets can easily cross borders, making it difficult for any single jurisdiction to control them.
The article also points to the financialisation of gambling as a broader trend. As prediction markets blur the line between betting and investing, they appeal to a demographic that might not otherwise engage with traditional gambling. This could expand the overall pool of people at risk of harm, while complicating efforts to track and treat problem gambling.
For the UK, where the Gambling Act review is ongoing and the government is considering tighter regulations, the emergence of prediction markets adds another layer of complexity. Policymakers must decide whether to bring these platforms under the gambling umbrella or create a separate regulatory framework. Either approach would require international cooperation to be effective, as prediction markets are inherently global.
The brewing storm, as Orme-Claye describes it, is not just about the potential for increased harm, but also about the challenge of maintaining the progress made in harm prevention. The UK betting industry has invested heavily in safer gambling initiatives, and the rise of unregulated alternatives could undermine that investment. The article calls for a proactive approach from regulators and operators alike to address the issue before it escalates.
In conclusion, the growth of prediction markets presents a significant test for gambling harm prevention efforts worldwide. The UK, with its mature regulatory framework and strong industry commitment to responsibility, may be better placed than most to adapt. However, the global nature of the problem means that no single country can solve it alone. The coming years will likely see increased debate over how to classify and regulate these markets, with implications for both the gambling industry and public health.