Sophie RobinsonPolymarket, the world's largest prediction market platform, is trending in the UK this week — but British users can't legally access it. The US-based platform has geoblocked UK connections after the Gambling Commission determined that its contracts likely fall under regulated gambling activity. The Dutch regulator KSA threatened Polymarket with fines of €420,000 per week in February 2026 for serving Dutch users without a licence — a sign that European regulators are taking serious action.
What Is Polymarket and Why Is It Trending in the UK?
Polymarket is a decentralised prediction market that allows users to bet on real-world outcomes using cryptocurrency — elections, economic events, sports, and geopolitical crises. Users buy and sell shares in "Yes/No" outcomes, with contracts settling at $1.00 (correct) or $0.00 (incorrect).
The platform gained global attention in 2024 when it accurately predicted the US presidential election outcome before major polling firms. In early 2026, during the Iran-US conflict escalation, Polymarket's markets on war outcomes, oil prices, and ceasefire negotiations attracted millions of dollars in volume — and thousands of curious UK users trying to access the platform via VPNs.
The platform currently enforces geoblocking for all UK-based IP addresses.
The Legal Problem: Binary Options and the Gambling Act
The UK has two overlapping regulatory frameworks that make Polymarket legally problematic:
The FCA Binary Options Ban (2019): The Financial Conduct Authority banned the sale of binary options to retail consumers in 2019. Because Polymarket contracts settle at either $1.00 or $0.00 — a binary outcome — they are frequently classified under this restricted category. Operating or promoting such products to UK consumers without authorisation is a criminal offence under the Financial Services and Markets Act 2000.
The Gambling Act 2005: Prediction markets are broadly interpreted as gambling. The UK Gambling Commission has not licensed any prediction market platform. Offering unlicensed gambling services to UK consumers carries significant penalties.
Using a VPN to access Polymarket does not make it legal: UK law applies to UK residents regardless of how they technically access a service. Using a VPN to circumvent geoblocking may constitute a breach of the platform's terms of service and, in some interpretations, could expose users to regulatory risk if funds are involved.
What Does This Mean for British Consumers?
For most UK users, the practical risk of simply viewing Polymarket is minimal. The regulatory concern is primarily directed at operators, not consumers. However, there are important financial and legal considerations:
Funds and withdrawals: Polymarket operates in cryptocurrency. If a UK resident manages to access the platform and deposits funds, there is no regulatory protection if the platform fails, misappropriates funds, or blocks withdrawals. The FSCS (Financial Services Compensation Scheme) does not cover unregulated crypto platforms.
Tax on winnings: HMRC's position on prediction market winnings is nuanced. Gambling winnings are generally tax-free in the UK — but if HMRC determines the activity constitutes investment (rather than gambling), capital gains tax or income tax could apply. Given Polymarket's hybrid financial-gambling nature, this is genuinely uncertain.
Legitimate alternatives in the UK: Licensed prediction and betting platforms operating under Gambling Commission licences — such as Smarkets, Betfair Exchange, and Spreadex — offer similar mechanics with full consumer protections. These platforms are regulated, your deposits are protected, and winnings fall clearly within the established gambling tax framework.
The Bigger Picture: Regulation of Prediction Markets in 2026
The UK is not alone in struggling with how to classify prediction markets. Across Europe, Italy, Belgium, Romania, France, Portugal, Hungary and the Netherlands have all either banned or fined Polymarket. In February 2026, the Dutch KSA threatened Polymarket with €420,000 per week in fines — the largest European enforcement action so far.
In the US, the Commodity Futures Trading Commission (CFTC) approved Polymarket as a regulated exchange in 2022, but only for non-US users. The regulatory paradox is stark: the platform is legal in many non-Western jurisdictions, regulated in the US through a workaround, and banned across most of Western Europe.
The UK Gambling Commission is expected to issue guidance on prediction markets in late 2026, as the sector grows rapidly and public interest increases.
When to Seek Legal Advice
If you have received a regulatory query relating to prediction market activity, if you are considering operating a prediction market or similar platform in the UK, or if you have concerns about the tax treatment of winnings from overseas gambling platforms, speaking to a specialist in financial regulation or gambling law is essential.
What About Tax on Prediction Market Winnings?
For UK residents who have accessed Polymarket via VPN or through overseas accounts, the tax question is genuinely unsettled. Here is what we currently know:
HMRC's gambling exemption: In the UK, winnings from gambling are generally exempt from income tax and capital gains tax. This applies to licensed UK bookmakers, casino games, and spread betting on financial markets. If HMRC treats Polymarket as gambling, winnings would be tax-free.
But is it gambling or investing? If HMRC determines that a user's activity is systematic and profit-seeking (i.e., treating the platform as an investment strategy rather than casual betting), it could reclassify the income as trading income — taxable at income tax rates. For high-volume traders who have made substantial profits, this distinction matters enormously.
Cryptocurrency complications: Polymarket uses USDC (a stablecoin pegged to the US dollar) for transactions. Even if the prediction market activity is treated as gambling, converting cryptocurrency back to sterling is a disposal event for capital gains tax purposes. UK crypto holders must report gains exceeding the annual CGT allowance (£3,000 in 2026) to HMRC, regardless of whether the underlying activity was gambling.
This means a UK user who made £10,000 profit on Polymarket could face zero tax (if classified as gambling) or thousands of pounds in tax (if classified as trading income or subject to crypto CGT) — a legal grey area that a tax specialist can help you navigate.
Legal and financial professionals on Expert Zoom can help you navigate the intersection of financial regulation, gambling law, and cryptocurrency — a rapidly evolving area where the wrong advice can be costly.
