Why I Wouldn’t Have Added Prediction Markets at Funded Trading Plus

Trust & Safety / Why I Wouldn’t Have Added Prediction Markets at Funded Trading Plus

Key Takeaways

• PropAccount.com, the white-label infrastructure sitting behind more than 175 prop firms worldwide, added prediction markets as a fully supported asset class on 6 July, live for any operator on its network within seven days, no new infrastructure spend required.
• Four major regulators, the UK Gambling Commission, the EU via ESMA, India and Australia, have already ruled prediction markets are gambling or an equivalent restricted product. That is not the grey zone prop trading itself currently operates in.
• The US remains the outlier, and that position looks more politically contingent than durable: on 11 August the CFTC invoked emergency authority to keep Kalshi trading after New York’s Attorney General sued it for over $36bn alleging an unlicensed gambling operation.
• Putting a chance-based product on the same brand, dashboard and KYC flow as a skill-based funded challenge hands anyone arguing prop trading itself is gambling a considerably easier case to build.
• My own view: I would not have made this call at Funded Trading Plus, though the commercial upside is real for an operator willing to price the regulatory risk in with open eyes.
• My prediction: most firms on PropAccount’s network will not take this up on their core brand. Watch instead for separately branded entities built purely to sell prediction markets.

Last updated: 12 August 2026. Correction, 13 September 2026: this piece originally attributed the UK Gambling Commission’s position to a written parliamentary answer of 16 February 2026. It was set out in the Commission’s own published guidance of 4 February 2026, which is the source this piece has always linked to. The Commission’s position itself is unchanged.

On 6 July, PropAccount.com, the white-label infrastructure sitting behind more than 175 prop firms worldwide, added prediction markets as a fully supported asset class. Any operator on its network can now launch a branded prediction market challenge inside seven days, running through the same dashboard, the same KYC, the same payment rails and the same capital backing as their existing FX, futures, crypto and equities challenges. No new platform, no new infrastructure spend. One vendor decision, live for well over a hundred firms at once.

The trade press covered it as a growth story, and on the numbers it is one. Prediction market volume went from roughly $9 billion in 2024 to $40 billion in 2025, and Acuiti’s latest survey has 13% of prop firms already trading the asset class, with another 31% considering it. That’s real, fast-growing demand.

I made the wider case for why 2026 regulatory forecasts for prop trading deserve more scepticism than most coverage gives them in Is Prop Firm Trading Regulated? The Real Record. Prediction markets are the sharpest test of that argument I have seen yet, because on this one specific product, several regulators have already made the call prop trading itself is still waiting on.

It’s also, in my view, one of the more risky products a prop firm can bolt onto its existing brand right now, and I think very few of PropAccount’s 175-plus firms will actually take it up once they’ve thought it through properly.

The regulatory map is already drawn

This isn’t a case of genuine grey-zone ambiguity, the kind the wider prop trading industry has learned to operate inside. On prediction markets specifically, several major regulators have already put their position on the record. The grey zone the rest of the industry sits inside rests on one specific technical fact, which I set out in what “live capital” on a prop firm really means: the accounts are simulated, so the firm is not handling client money in a live market.

The UK Gambling Commission stated on 4 February 2026 that prediction markets would be classified as a Betting Intermediary, the same category as a betting exchange, and would require a Gambling Commission licence to operate in Great Britain. Operators without one are expected to actively avoid targeting or transacting with UK consumers, on pain of a criminal offence, not a fine.

The EU’s position, via ESMA’s statement on 3 July, three days before PropAccount’s launch, took a different legal route to a similar destination: event contracts that qualify as financial instruments remain subject to the bloc’s existing binary options ban for retail clients, regardless of what a firm calls them commercially, and require full MiFID II authorisation to distribute to any client at all, retail or professional.

India has gone furthest of all. The Promotion and Regulation of Online Gaming Act came into force on 1 May 2026, prediction markets are classified as prohibited online money gaming under it, Polymarket has already been blocked at the internet service provider level, and a similar order against Kalshi is reportedly being prepared by India’s newly stood-up Online Gaming Authority. Australia has taken the same enforcement path: ASIC and ACMA examined how these platforms actually function, found no risk management, no investment structure, nothing that reads as a financial product, and ruled it gambling outright. Polymarket only restricted Australian users after that ruling landed.

The United States is the outlier, for now, and this is where the picture has moved fastest. The CFTC has been going in the opposite direction to every regulator above, withdrawing its own 2024 proposal to ban political prediction markets and fighting states directly to keep gambling law off Kalshi and Polymarket’s books. That fight went from posture to open confrontation on 11 August, the day after I published my read on the industry’s wider regulatory position. New York’s Attorney General had sued Kalshi eleven days earlier, on 31 July, alleging it was running an unlicensed gambling operation and seeking over $36bn in damages. The CFTC responded by invoking emergency authority to keep Kalshi trading, arguing in federal court that a single state cannot be allowed to become the de facto national regulator for event-contract swaps. That regulatory posture happens to sit directly downstream of a well-documented financial interest: Donald Trump Jr. holds a paid advisory role and equity stake in Kalshi and an advisory position at Polymarket, and the administration has been public in wanting the CFTC to keep exclusive authority here. That’s a genuinely unusual alignment of political and commercial interest, and not something any operator should assume outlives this presidency. It is now a live court fight rather than a settled policy position, which makes it considerably less stable ground to build a product on than it looked even a fortnight ago.

So the honest summary for an operator weighing this up: sell into the US today and the wind is currently at your back, though that wind is now blowing through an active federal court case rather than a quiet policy preference. Sell into the UK, the EU, India or Australia, and you’re not operating in a grey zone at all, you’re operating against a regulator’s stated position, in two of those four markets already backed by active enforcement.

The real risk isn’t the product line, it’s the whole business

Here’s the part I think gets missed when this is covered purely as a growth story. Prop trading was never a regulated trading business to begin with, precisely because no customer is investing their own money in a real market. That’s what keeps a prop firm outside the regulatory perimeter that applies to a genuine brokerage or fund, it isn’t regulated trading, and it has never needed to defend itself as such.

The separate argument it does need to keep winning is whether the challenge itself is a game of skill or a game of chance, because that’s the line that keeps a funded evaluation from being read as a straightforward bet on your challenge fee. A trader making ongoing decisions in a simulated but genuinely responsive market is what has, so far, kept regulators from pulling prop trading challenges into the same gambling category they’ve now pulled prediction markets into.

Putting a literal binary, yes-or-no event contract, resolved by an outside event rather than by anything the customer does, on the same brand, the same dashboard, the same KYC flow as a funded evaluation challenge, doesn’t just add a new product line. It puts a genuine chance-based product directly next to the skill-based one, under the same name. Every regulator that has looked closely at prediction markets so far, the UK Gambling Commission, ESMA, ASIC, has reached the same conclusion: no skill, no risk management, just a stake on an outcome. A firm that places that product on the same platform as its prop trading challenges hands anyone looking to make the same argument about the challenges themselves a considerably easier case to build.

Why I wouldn’t have made this call

Funded Trading Plus was, like every prop firm at the time, an unregulated UK company. My co-founders and I spent real money on legal advice specifically to understand where the lines were on selling prop trading products, including to US customers, and we built the business inside that legal advice deliberately and carefully. I have written separately about how that business ended, in why we sold Funded Trading Plus to Instant Funding.

Adding a product a UK regulator would call gambling, on the same brand we were actively defending as legitimate prop trading, isn’t a call I would have made. I suspect my former co-founders would have landed in the same place, though I can only speak for my own judgement here, not theirs. FT+ was sold to Instant Funding and is under entirely new ownership now. Nothing in this piece is a comment on how its current owners should or will approach this question, that call is theirs to make. The point stands as a general one about operator judgement, not an instruction to any specific firm, past or present.

Not because the revenue upside isn’t real, it clearly is, but because adding a product like this puts a pure chance-based product right next to the skill-based one you rely on to keep the whole business out of the gambling category, at the exact moment that argument matters most. That’s a trade no operator running the real legal exposure should take lightly, regardless of how easy the infrastructure makes it to switch on.

The prediction

It’s also worth being straight about the other side of this. If prediction market volume keeps compounding anywhere near the pace it has, from $9 billion in 2024 to $40 billion in 2025, this could become a genuinely material revenue line for whichever operators get in early and build real volume before the regulatory picture hardens further. That’s not automatically a reckless bet. For a firm with limited exposure to the stricter jurisdictions, or one willing to price the regulatory risk in with open eyes, this could be a rational, well-calculated commercial decision rather than a careless one. It is worth separating real regulatory movement from noise here, because plenty of what reaches this industry as a regulatory development turns out not to be one. See no, the SEC has not charged any prop firm.

That’s exactly what makes it worth watching rather than dismissing outright. PropAccount has built this so that turning prediction markets on just takes days and no new infrastructure, that ease of adoption is the whole pitch. My prediction is that most prop firm operators still won’t take it up, not because the money isn’t real, but because for most firms the trust cost will outweigh it. The ones who do turn it on, particularly with real exposure to the UK, EU, India or Australia, are sending a genuinely mixed signal: real commercial ambition sitting right next to a decision that puts the skill-based defence protecting their whole business at risk. That combination, chasing meaningful upside while accepting real downside to trust and durability, is exactly the kind of decision this publication exists to flag before it becomes a payout story, whichever way it turns out for the firms that make it.

A related prediction: expect some operators to sidestep the trade-off altogether by setting up a separate, distinctly branded site or entity purely to sell prediction markets, keeping their existing prop trading brand, and the skill-based argument protecting it, entirely apart from anything that looks like a chance-based bet. That’s the more careful route for a firm chasing the same revenue without taking the trust risk directly onto its core challenges, and probably the more common path for any operator serious about the money rather than just testing the water on their main brand.

The downside to this route is building a new brand up from zero. None of the existing trust, customer base, or acquisition efficiency the operator already has in its prop trading brand carries over, every one of those has to be earned again from a standing start, which is exactly the cost the shared-brand approach was trying to avoid paying twice.

I’ll be watching which firms on PropAccount’s network actually go live with this, and treating that list as a genuine data point on operator judgement, not just a feature adoption number. I’ll also be watching how the Kalshi/New York case develops: if New York’s gambling argument survives the CFTC’s emergency motion, even in part, that is the clearest possible signal to any prop firm still weighing this decision that the ground in the one jurisdiction currently welcoming this product is not as settled as it looks today.

Note: Neither Funded Trading Plus nor Instant Funding currently use the PropAccount network for prop trading infrastructure.

Frequently Asked Questions

Are prediction markets legal at prop firms?

Not uniformly. The UK Gambling Commission, the EU via ESMA, India and Australia have all treated prediction markets as gambling or an equivalent restricted product requiring separate licensing. The US position remains the exception, and is currently being contested in federal court after New York’s Attorney General sued Kalshi in July 2026 alleging an unlicensed gambling operation.

Does adding prediction markets put a prop firm’s whole business at risk, not just the new product?

That’s the operator-level risk this piece argues, yes. Prop trading challenges have so far avoided gambling classification because a trader makes ongoing decisions in a responsive simulated market, a skill-based defence. Placing a chance-based, outcome-resolved product on the same brand and platform weakens that defence for the whole business, not just the prediction market product line.

Will Funded Trading Plus or Instant Funding add prediction markets?

Neither firm currently uses the PropAccount network that supports this product, and this piece is not a comment on either firm’s future plans, that decision sits with their current ownership and management, not with this site.

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