UK Betting Exchange Decline Accelerates Amid US Prediction Market Surge

The UK Gambling Commission’s 2025/26 Annual Report has documented a continued decline in betting exchange activity. Exchanges now represent 3.79% of Gross Gambling Yield, generating £92.66m in the period from April 2025 to March 2026. This figure has almost halved since 2026/17 when GGY stood at £171.53m.

The contraction rate for exchanges stands at 46%, exceeding the 26.8% fall in land-based betting shop revenue over the same timeframe. In contrast, general remote sportsbook GGY has risen from £1.75bn.

The Persistent Decline in UK Betting Exchanges

Betting exchanges have lost ground despite the presence of established platforms including the Betfair Exchange and Spreadex. Recent revamps at operators such as Matchbook and Smarkets have not reversed the trend. The drop has been steeper than that seen in retail betting, though it has attracted less media coverage.

Jason Trost, Chief Executive Officer of Smarkets, highlighted the conceptual overlap with prediction markets. “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. 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,” Trost told SBC News.

Smarkets has revamped its platform to align with US prediction market models. Matchbook became the first British firm to enter prediction markets in December and signed a white label deal with ADI Predictstreet ahead of the FIFA World Cup.

The US Contrast and UK Regulatory Path

US prediction markets have seen exponential growth, with Polymarket and Kalshi both eyeing valuations in the billions. This boom stands in stark contrast to the UK exchange decline. Gibraltar has introduced the first standalone regulatory framework for prediction products.

UK rules currently block retail access to full prediction markets by prohibiting unlicensed binary-option style products. The Financial Conduct Authority recently held exploratory talks on relaxing these restrictions. IG Group acquired Underdog, a US DFS platform poised to emphasize predictions, while Plus 500 launched its own US-facing product in partnership with Kalshi.

The resemblance between exchanges and prediction markets is clear in their financially-inspired design. However, the UK trajectory remains uncertain without further regulatory clarity. Operators and investors will watch developments closely for signals on potential market expansion.

Reporting: SBC News

Generated by SCCG’s automated editorial system from published source reporting. SCCG Management holds editorial responsibility.