Prediction markets legality as gambling or derivative trading platforms, & rules

[Hispo]

From the several news read here about the prediction market or the polymarket, is never something very encouraging, the reason is because the prediction market is really seen to be so corrupt because of the kind of activities that is going on there, such as the insider's information. The prediction market being band by this countries must be for some food reasons, and that is the reason these countries mentioned here are making sure it is band. But nevertheless, what is happening in the prediction market is also happening in the forms of sports. On this note every country should ensure good maintenance of the welfare of the country.

The situation with prediction markets, like Polymarket, is not as dire as you believe, even if there is obvious corruption going on because of insider information in some countries like the United States and also some countries in south america and Europe.
Even if there is some corruption going on, the current administration of the USA seems to be very soft on prediction markets, because Trump and his family have personal stakes on those companies.
It would take a very radical democrat government in the United States for Polymarket and Kalshi to be banned by the federal government, and even so, the case can be brought to the supreme court of the country, to be contested.

I do not think prediction market are going anywhere in the mid or long term.
We will continue to be able to partake in those markets, even if they have nothing to do with sports or politics.

[Oshosondy]

UK financial watchdog weighs lifting prediction markets ban: Report

The reason UK do not allow prediction markets not to operate in their country is because they see it as gambling, but not because they are totally gambling, but because many contracts that prediction markets are offering are seen as binary options.

Binary options has been banned in the UK since 2019 by the UK’s Financial Conduct Authority (FCA)

According to The Times report, many retail investors based in the UK have been using virtual private networks (VPNs) to bypass the country’s restrictions on prediction markets and execute trades on Kalshi and Polymarket, both with operations in the US. Bernstein Research speculated in April that the total prediction market industry could rise to about $240 billion in trading volume in 2026 and $1 trillion in 2030.

Who knows the UK government may be thinking of missing taxes the reason they are planning on making prediction markets legal. If prediction markets are legal in the UK, it is very possible the gambling regulators may start something that is happening in the United States between prediction markets/CFTC and gambling regulators.

[Yeesha]

UK financial watchdog weighs lifting prediction markets ban: Report

The reason UK do not allow prediction markets not to operate in their country is because they see it as gambling, but not because they are totally gambling, but because many contracts that prediction markets are offering are seen as binary options.

Binary options has been banned in the UK since 2019 by the UK’s Financial Conduct Authority (FCA)

According to The Times report, many retail investors based in the UK have been using virtual private networks (VPNs) to bypass the country’s restrictions on prediction markets and execute trades on Kalshi and Polymarket, both with operations in the US. Bernstein Research speculated in April that the total prediction market industry could rise to about $240 billion in trading volume in 2026 and $1 trillion in 2030.

Who knows the UK government may be thinking of missing taxes the reason they are planning on making prediction markets legal. If prediction markets are legal in the UK, it is very possible the gambling regulators may start something that is happening in the United States between prediction markets/CFTC and gambling regulators.

Legalisation of prediction markets shouldn't bring any conflicts between gambling regulators and prediction markets, besides every site should focus more on what they know how to do most. Because if US government has decided to legalise prediction markets there is nothing gambling regulators can do about it without the intervention of the law, and no one be there to support or defend them. Especially if the government and all systems are benefiting from it. Some of the citizens will support the government with this decision, because legalisation of prediction markets will give them more chance and freedom to participate without them bypassing any restrictions.

[Charles-Tim]

Legalisation of prediction markets shouldn't bring any conflicts between gambling regulators and prediction markets, besides every site should focus more on what they know how to do most. Because if US government has decided to legalise prediction markets there is nothing gambling regulators can do about it without the intervention of the law, and no one be there to support or defend them. Especially if the government and all systems are benefiting from it. Some of the citizens will support the government with this decision, because legalisation of prediction markets will give them more chance and freedom to participate without them bypassing any restrictions.

First of all, I think you are referring to United Kingdom government instead of the United States government because prediction markets are legal in the United States, but gambling regulators prefer to regulate it because they it as gambling. Even in the UK, there will not be a change in the fact that they are seen as gambling, but in a way that UK government wants to make binary options legal which will make prediction markets legal.

If binary option prediction markets become legal in UK, do not say that no one will support UK Gambling Commission, but let us see how it will later be, but I think the gambling regulators may not win against FCA. If this is successfully done by FCA, gambling regulators should forget about regulating the prediction markets in western nations.

[Julien_Olynpic]

It's funny that I used to play binary options on binary.com and didn't know that binary options were banned in the UK. I think short-term binary options have a lot in common with both prediction markets and casinos, but more so with casinos. Long-term binary options (the platform I mentioned above offered one-year binary options on the outcomes of various financial assets) are similar. As for prediction markets, they're similar to both gambling and trading at the same time. The best approach would be to establish a separate commission to regulate them. That's if the country is even willing to regulate prediction markets, rather than ban them.

[GreatArkansas]

It's funny that I used to play binary options on binary.com and didn't know that binary options were banned in the UK. I think short-term binary options have a lot in common with both prediction markets and casinos, but more so with casinos. Long-term binary options (the platform I mentioned above offered one-year binary options on the outcomes of various financial assets) are similar. As for prediction markets, they're similar to both gambling and trading at the same time. The best approach would be to establish a separate commission to regulate them. That's if the country is even willing to regulate prediction markets, rather than ban them.

Short-term binaries feel more casino than trading. Prediction markets I put in the middle, like you said. I still prefer sports betting for entertainment, prediction markets more if you want forecasting style. Separate commission sounds better than blanket ban for me, if the country is willing, because ban usually just push people offshore anyway.

[Zlantann]

First of all, I think you are referring to United Kingdom government instead of the United States government because prediction markets are legal in the United States, but gambling regulators prefer to regulate it because they it as gambling. Even in the UK, there will not be a change in the fact that they are seen as gambling, but in a way that UK government wants to make binary options legal which will make prediction markets legal.

If binary option prediction markets become legal in UK, do not say that no one will support UK Gambling Commission, but let us see how it will later be, but I think the gambling regulators may not win against FCA. If this is successfully done by FCA, gambling regulators should forget about regulating the prediction markets in western nations.

Based on federal laws, prediction markets are not illegal in the US. Nevertheless, in some states it is. Minnesota state legislature passed a law that bans the establishment or use of prediction markets in the state. There are court orders in states like Nevada, Michigan, and Washington restricting the operations of major prediction market platforms.

The forecast that the prediction market will hit a trading volume of $1 trillion in 2030 is very attractive. If the UK government fails to unban the market, it might lose out on high returns from taxes. The market is so attractive that UK users would use means to bypass these restrictions.

[Bluedrem]

Legalisation of prediction markets shouldn't bring any conflicts between gambling regulators and prediction markets, besides every site should focus more on what they know how to do most. Because if US government has decided to legalise prediction markets there is nothing gambling regulators can do about it without the intervention of the law, and no one be there to support or defend them. Especially if the government and all systems are benefiting from it. Some of the citizens will support the government with this decision, because legalisation of prediction markets will give them more chance and freedom to participate without them bypassing any restrictions.

Whether prediction market or casino, are they only focused on the United States? What kind of decision did the US President make about prediction market or gambling? Apart from these, there is a huge market for all the casino sites that provide services worldwide. Casinos and prediction markets are spread from all over Europe to Asia. Although they are banned in many countries of the world, prediction markets and casinos are still legal in many countries and they have been paying taxes to the government. And I don't see much difference between these two things because in both places users have to risk their money and if they are lucky, they win.

[Smartprofit]

It's funny that I used to play binary options on binary.com and didn't know that binary options were banned in the UK. I think short-term binary options have a lot in common with both prediction markets and casinos, but more so with casinos. Long-term binary options (the platform I mentioned above offered one-year binary options on the outcomes of various financial assets) are similar. As for prediction markets, they're similar to both gambling and trading at the same time. The best approach would be to establish a separate commission to regulate them. That's if the country is even willing to regulate prediction markets, rather than ban them.

Prediction markets are neither classic asset trading nor classic gambling. I think everyone agrees on that.🙋

At the same time, officials strive to ban everything, or at least restrict it as much as possible. This is the mentality of all officials; they love to ban everything...

20th-century laws are simply unsuitable for regulating the new social technologies of the 21st century (this must be acknowledged). I have no doubt that officials will pursue total bans. However, in response, new decentralized internet platforms will emerge where bets can be placed in cryptocurrencies (perhaps even in ones like Monero). Progress is unstoppable. Just today, I read how a European official was outraged by the fact that Polymarket and Kalshi operate within Europe. One could counter this official by saying that they (especially Polymarket) operate not within the territory of any specific country, but within the territory of the Virtual Space, which is essentially a supranational entity.  But I'm afraid that this official won't understand anything and will only be offended... 💁

[Awaklara]

And I don't see much difference between these two things because in both places users have to risk their money and if they are lucky, they win.

Some countries that ban prediction markets also consider prediction markets the same as gambling sites. That's why they apply the same regulations by banning prediction market sites. 
However, in some countries that ban gambling and prediction markets, we can still access casinos. Although that is something illegal, the government may not be able to do much. What they do is just block prohibited sites, they will not deal with the gamblers. What they might track is if someone operates an illegal casino in their country.

[Grace333]

Prediction market is not gambling neither is it trading, so those that will be going for it should be well prepared for the risk that is associated with this, I will also support the government when it comes to things like this to be banned because of the danger and risk that is there, while the process has no reliability.

If the prediction market is neither gambling or trading what is it then? In my opinion the prediction market is more of trading and gambling combined and my reason for that is because you stake an amount of money on a particular prediction hoping to make profit and knowing fully well that the outcome is uncertain, what do you call that? It's obviously gambling and on the other hand you also buy and sell positions which makes it more of trading, this is why I said that it is a combination of both.
This poses to be very dangerous like you said and the government should work on different ways to regulate it because of the risks it comes with.

[Bluedrem]

Some countries that ban prediction markets also consider prediction markets the same as gambling sites. That's why they apply the same regulations by banning prediction market sites. 
However, in some countries that ban gambling and prediction markets, we can still access casinos. Although that is something illegal, the government may not be able to do much. What they do is just block prohibited sites, they will not deal with the gamblers. What they might track is if someone operates an illegal casino in their country.

To be honest, after the ban on Juan, the amount of gambling in my country has increased. Even those who did not know much about gambling before, after hearing about the ban on Juan, have also gotten involved in gambling while searching for what gambling is.
I think the information about the ban on gambling in my country has worked like a propaganda for gambling.
However, so far I have not seen many gamblers being punished for gambling in my country.
And speaking of gambling and prediction markets. If there are opportunities in gambling such as slots and spins, in the prediction market we can only bet money by predicting an event.

[Pandu Geddon]

If the prediction market is neither gambling or trading what is it then? In my opinion the prediction market is more of trading and gambling combined and my reason for that is because you stake an amount of money on a particular prediction hoping to make profit and knowing fully well that the outcome is uncertain, what do you call that? It's obviously gambling and on the other hand you also buy and sell positions which makes it more of trading, this is why I said that it is a combination of both.
This poses to be very dangerous like you said and the government should work on different ways to regulate it because of the risks it comes with.

Some countries consider prediction markets as gambling, especially countries that prohibit gambling. It's not only the bets that draw attention, but the markets opened in the prediction markets also get attention. We know that prediction markets not only open sports markets, but many are interested in markets that speculate on real-life events. 
Personally, I see prediction markets just like gambling. And the regulations implemented should be related to those applied to gambling, including user age or excluded regions.

[KiaKia]

Great, I hope more countries will follow, America is the major pusher of these prediction markets and they are not healthy, trust me they are backing nonsense because they want to make money.

If someone like Hunter can release his own meme coins and said he plans to make money with it then it says it all, America will back any nonsense if they can make alot of money from it.

I expect south Korea to be on that list even before reading OP, some countries won't do some things even though they can benefit for it, they will always put humanity first before money, not America likes.

[Jubilee58]

The reason why these countries have ban the prediction market, and gambling is what I don't really know, and they might also have different reasons for initiating such action. I believe there is no country that one for of gambling or the other is not taking place, and I equally believe in these countries which are given law to stop gambling, some persons will still be gambling maybe using VPN. However, gambling can be addictive most times, and that could be the reason why some countries are banning it, and even at that some countries are also using gambling to generate job opportunities, and create income for their own countries for instance the European countries, and if you ask me, I prefer a more regulated gambling instead of stopping it entirely, because even if you feel some gamblers are abusing it, there are also responsible gamblers who in one or the other benefit from gambling too.

[Filicius]

The reason why these countries have ban the prediction market, and gambling is what I don't really know, and they might also have different reasons for initiating such action. I believe there is no country that one for of gambling or the other is not taking place, and I equally believe in these countries which are given law to stop gambling, some persons will still be gambling maybe using VPN. However, gambling can be addictive most times, and that could be the reason why some countries are banning it, and even at that some countries are also using gambling to generate job opportunities, and create income for their own countries for instance the European countries, and if you ask me, I prefer a more regulated gambling instead of stopping it entirely, because even if you feel some gamblers are abusing it, there are also responsible gamblers who in one or the other benefit from gambling too.

As you can see in the OP's list, there are several European countries there where prediction markets have been banned, but where gambling is completely legal and thoroughly, I would say even fairly, regulated. The question lies in the nature of these markets, in their novelty and the risks they entail.

In a casino, the probabilities of winning or losing do not change depending on the information that each user handles. A greater or lesser skill can help in certain cases, not in most, nor decisively. The same does not seem to happen with the prediction of events, in which we are seeing very notorious cases of personalities with first-hand information who take advantage of their circumstances to win. In a zero-sum game, this makes the rest of the players without privileged information much more likely to lose, which in a sense could be considered a scam because they are not aware of it.

That is why I believe that until things are clarified, the option that has been taken in these countries has been made out of prudence, rather than out of a desire to prohibit for the sake of it.

[Charles-Tim]

If the prediction market is neither gambling or trading what is it then? In my opinion the prediction market is more of trading and gambling combined and my reason for that is because you stake an amount of money on a particular prediction hoping to make profit and knowing fully well that the outcome is uncertain, what do you call that? It's obviously gambling and on the other hand you also buy and sell positions which makes it more of trading, this is why I said that it is a combination of both.

You are correct, that is what prediction markets are and they give it a new name called prediction markets. But they moved towards the regulators that regulate trading.

Also what will you call trading? Do you know that some people can argue that trading is also gambling? You bet on the price of something to either go up or down, but you do not see the future.

With the way prediction market will be as I am seeing it, it will later be seen as trading, although it is prediction market.

[Oshosondy]

Polymarket users referred to prosecutors in South Korea: Report

You know South Korea is among countries that we listed that banned prediction markets, but I think the regulators in the country really mean it as South Korean police referred 18 Polymarket users to prosecutors in a gambling probe involving 26 people and $12.7 million in bets. The report said the largest amount wagered by a single user was about 5.7 billion won ($4.1 million).

Authorities reportedly said Polymarket transactions constitute illegal gambling under South Korea’s Criminal Act because users stake assets on outcomes that cannot be predicted with certainty. The users argued that Polymarket should instead be treated as a crypto-based derivatives investment market, according to the report.

https://cointelegraph.com/news/south-korea-polymarket-users-prosecutors-gambling-probe

I do not think this hostility is worth it. Not that they steal, but they want them to be prosecuted.

[Moreno233]

If the prediction market is neither gambling or trading what is it then? In my opinion the prediction market is more of trading and gambling combined and my reason for that is because you stake an amount of money on a particular prediction hoping to make profit and knowing fully well that the outcome is uncertain, what do you call that? It's obviously gambling and on the other hand you also buy and sell positions which makes it more of trading, this is why I said that it is a combination of both.

You are correct, that is what prediction markets are and they give it a new name called prediction markets. But they moved towards the regulators that regulate trading.

Also what will you call trading? Do you know that some people can argue that trading is also gambling? You bet on the price of something to either go up or down, but you do not see the future.

With the way prediction market will be as I am seeing it, it will later be seen as trading, although it is prediction market.

If you call trading gambling, then you will be invariably saying that the entire thing they do in the New York Stock Exhange is gambling. I don't think this sounds correct so trading is not gambling even though both of them are risky to a large extent. Both are done of different platforms and different settings with different rules, so despite the risk, trading is completely different from gambling, only in approach by aj individual can we liken trading to gambling.

[hedgeh0g]

Know that some of these countries like Indonesia and South Korea banned gambling. Prediction market operators see prediction markets as platforms where derivatives are traded, but some countries see them as gambling sites.

Any country that you know that I have not mentioned that banned prediction markets, you can post about it.

Any news we see about the legality of prediction markets as gambling sites or not, we can post about it on this thread.

South Korea has indeed blocked access to Polymarket, but it should be noted that this does not apply to all prediction markets in general. In general, the decision concerned only this service, and it was deemed a form of illegal online gambling within the country. As far as I remember, there were no restrictions on other similar services.
The point is that their internet service providers received an order to restrict access to the platform’s domain, but as a rule, this can be easily circumvented using a VPN. The authorities simply considered Polymarket’s structure to be in violation of the country’s criminal code. They believed that this platform overly encourages people to engage in speculative gaming behavior.