Polymarket raises new concerns in the United Kingdom. The predictive markets platform records nearly 77,500 dollars bet on the failure of major banks, including HSBC and Lloyds. Facing the ri
Polymarket raises new concerns in the United Kingdom. The predictive markets platform records nearly 77,500 dollars bet on the failure of major banks, including HSBC and Lloyds. Facing the risk of manipulation and banking panic, a British MP calls for regulator intervention. Polymarket, for its part, defends the usefulness of these markets.
Prediction markets are gaining ground, but their development raises new regulatory questions. After the toughening of the European stance against Polymarket and Kalshi, bets on bank failures are now attracting the attention of British authorities.
On Polymarket, users have placed nearly 77,500 dollars on the possible failure, before the end of the year, of several major international banks, including JPMorgan, BNP Paribas, HSBC and Lloyds.
This situation worries Bobby Dean, Liberal Democrat MP and member of the British Treasury Committee. He believes that surveillance gaps on the platform could facilitate manipulation and amplify panic movements in the markets.
The MP thus asks British regulators to liaise with their American counterparts. For its part, the Financial Conduct Authority (FCA) states that it is already exchanging with international authorities to preserve market integrity. The Bank of England is also monitoring emerging risks. So far, HSBC and Lloyds have not responded.
Polymarket rejects the alarmist interpretation. “The information on these markets is already public“, argues its legal director Neal Kumar, for whom banks and funds have long had access to CDS markets. Expanding this access even contributes to the fight against misinformation, he adds.
Criticism, however, flows in, including from the United States. The FDIC, the American deposit insurance, looked into these contracts and the ethical rules of its employees this fall, according to Bloomberg. Its former chairwoman, Sheila Bair, believes they have no social value and encourage players to fuel rumors and panic.
Senator Elizabeth Warren calls it a “wild west” riddled with manipulations. Kalshi, the regulated competitor, does not offer such contracts and deems them “in poor taste”.
Europe is advancing in parallel. ESMA warned in September that prediction markets are plagued by insider trading, citing portfolios created just before the conflict with Iran in February, or the American soldier charged for bets on the arrest of Nicolás Maduro.
The platform is already blocked in France, where the 2027 presidential election attracts bets through workarounds. Facing criticism, the platform introduced voluntary deposit limits and blocks.
However, the legitimacy trial is also fought over words. Defenders see it as a counter-power to rumors, detractors as a moral hazard. A duel that the prediction markets news documents weekly.
Amounts remain modest compared to traditional financial markets. It is the trajectory that worries, more than the current size. Legal troubles accumulate, such as the recent Kalshi loss on appeal over its sports contracts. The next major decision could come from Washington, where the CFTC claims its jurisdiction against lawmakers demanding tougher rules.
