The Gambling Commission’s 2025/26 Annual Report highlighted a sharp decline in British betting exchange activity.
Betting exchanges now make up just 3.79% of Gross Gambling Yield (GGY) in the UK, with the figure sitting at £92.66m for April 2025-March 2026.
GGY on betting exchanges has almost halved since 2026/17 (GGY: £171.53m) despite the continued presence of the Betfair Exchange and Spreadex, and recent revamps at operators such as Matchbook and Smarkets.
Data shows that exchange GGY has contracted faster than high street land-based betting shop revenue in that time, dropping by 46% compared to 26.8%, despite maybe not getting as much media attention that the drop in retail betting has.
During the same period, general remote sportsbook GGY rose from £1.75bn to around £2.5bn.
While the decline in retail may not come as a surprise to regular observers of the Commission’s Annual Report, it might shock a few given the similarities one could see with prediction markets, which have experienced an exponential rise in popularity in the US.
Apples and oranges?
The decline in UK betting exchange activity comes amid a surge in prediction markets activity in the US. Prediction markets are also gaining ground internationally with the British Overseas Territory of Gibraltar setting up the first standalone regulatory framework for the products.
Commission data raises some new questions – could the decline in betting exchange activity be a sign that British bettors have little interest in more financially-inspired products, and therefore predictions? Or could it be that these exchange bettors are actually being drawn to predictions instead?
Another likely outcome is that exchanges are losing consumers to traditional sportsbooks, with those continuing to improve their products amid the rise in popularity of bet builders and multi-sport accumulators, to name a couple. But the resemblances between predictions and exchanges is obvious.
Granted, exchanges are for betting against users with the business taking a commission fee, while prediction markets are financial derivatives platforms where users trade “event contracts” priced from $0-$1. The similarities between the two have not been lost on many industry commentators, however, due to both having a financially-inspired nature.
“They’re called betting exchanges in the UK. They’ve existed for 20 plus years in the UK in a very legal, stable framework here,” Jason Trost, Chief Executive Officer of Smarkets, told SBC News in an interview this year.
“This concept of a prediction market coming to the UK – it’s here already. It’s like soccer and football – they’re not apples and oranges, they’re both apples.”
Smarkets has since revamped its platform to represent that of a US predictions platform.
Matchbook, another heritage UK betting exchange, became the first British firm to enter prediction markets back in December, and signed a white label deal with FIFA World Cup prediction markets partner ADI Predictstreet just before the tournament kicked off.
UK prediction market-esque products remain more closed off than in the US, with controversial politics and war-based event contracts seen on platforms like Polymarket absent. For now, predictions in the UK appear a bolt-on to the traditional exchange.
The contrast in fortune also appears as an indicative of ‘apples and oranges’. Polymarket and Kalshi are both eyeing valuations in the billions, while Gambling Commission data confirms that the once-fruitful offering of the betting exchange is continuously declining.
Ultimately though, whether prediction markets can make it in the UK is speculative at this point. Although Gambling Commission data and comparisons with betting exchanges can give us some idea, some regulatory clarity is needed first…
Could predictions launch in the UK?
The UK effectively blocks retail access to prediction markets under a ban on unlicensed binary-option style products. This likely doesn’t stop many users from accessing prediction markets products, beyond the similar ones offered by legal exchanges, via a VPN.
There may be a way for predictions to enter the UK market soon, too, as the Financial Conduct Authority (FCA) recently held exploratory talks about potentially relaxing the restrictions mentioned above.
Meanwhile, listed UK firm IG Group recently acquired Underdog – a US daily fantasy sports (DFS) platform which has hinted at making its predictions its primary offering – while FTSE 250 constituent Plus 500 launched its own US-facing prediction markets product earlier this year via a partnership with Kalshi.
Key stakeholders clearly believe that there could be some appreciation for prediction markets in the UK, despite the turn in fortunes of betting exchanges and even with the biggest prospects remaining in the US.
But should predictions make it to British shores, will exchanges benefit off the back of that, and perhaps more pertinently – how?
For now though, the decline continues for one of the veteran products of UK betting, despite such a similar product being hailed as revolutionary stateside.
Want to find out more about Prediction Markets? The Global Prediction Market Forum is being held in Lisbon on 1 October. Visit https://sbcevents.com/global-prediction-markets-forum/ for more details.