Will Polymarket and Kalshi ever lead prediction market surge in UK?
Around $2bn was staked on prediction markets across last week’s US midterm elections, yet sites like Polymarket and Kalshi aren’t categorised as bookmakers across the pond. The sector is rapidly growing, with binary markets becoming subject to increased spend across America: how many tweets Elon Musk will post on X today is a real market, [...]
Polymarket and Kalshi, two prediction market platforms, have amassed significant stakes during the recent US midterm elections, yet these platforms are not considered bookmakers in the UK. The prediction market industry is experiencing rapid growth, with increased spending on binary markets in America. These markets cover topics such as the number of tweets Elon Musk will post, the next Democratic presidential nominee, Bitcoin's price at a specific time, and Anthropic's IPO closing market cap.
This surge in popularity has led to several contracts in American sports, including a potential £200m deal between Major League Baseball and Polymarket. Basketball's NBA has also partnered with both Kalshi and Polymarket. The question arises: will these prediction markets expand into the UK's Premier League, Hundred, or other competitions?
The British betting market is already diverse and closely regulated, with scratchcards and bingo halls being popular venues. Betting exchanges like Betfair, which serve as the UK's closest equivalent to prediction markets, are monitored by the Gambling Commission and the Financial Conduct Authority. Obtaining a license to operate prediction markets in the UK is costly and challenging.
According to Professor Rob Wilson, a sport finance expert, the primary hurdle for entry is regulation rather than lack of demand. Wilson believes that prediction markets, like crypto, would likely adopt a sponsorship approach similar to Asian betting sites, which have gained global recognition without UK access.
One significant obstacle for prediction markets in sports sponsorship is the UK government's planned ban on unlicensed gambling brands. While prediction markets do not view themselves as casino products in the US, the UK may perceive them as gambling operators, making licensing a requirement. Sponsorship could be a possible entry point, possibly through UK-based properties like the NBA game in Manchester or the NFL's presence in London. The Polymarket-UFC deal may see implementation at the O2 Arena before long.
Wilson suggests that prediction market partnerships would typically involve digital inventory and activation, broadcast integration, and data usage to engage fans. The platforms are designed around engagement and sport, making them a natural fit for continued growth in the industry. However, the UK government's strict regulation on betting and gaming operators may prevent prediction markets from becoming a mainstream sponsorship option.
Despite the challenges, prediction markets are likely to make their way into the UK sports scene in some capacity.
Written by urgent.news from City AM's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
