UK FCA Weighs Lifting Retail Ban on Prediction Market Platforms

The UK Financial Conduct Authority is considering easing its ban on prediction market platforms for retail investors, a restriction that has been in force since 2019.

Cointelegraph reported on September 7, citing The Times, that the FCA has been in contact with operators of prediction market platforms including Polymarket and Kalshi to discuss whether the ban should be lifted.

Prediction markets offer binary options tied to the outcome of events such as sports, politics and weather. The FCA imposed a blanket ban in April 2019 on the sale, marketing and distribution of binary options to retail investors, calling them “gambling products dressed up as financial instruments.” Christopher Woolard, then the FCA’s executive director of strategy and competition, used the same description at the time.

Many retail investors in the UK are continuing to trade on US-based Kalshi and Polymarket after using virtual private networks to bypass the rules, The Times reported. Bernstein said in an April report that total prediction market trading volume could reach about $240 billion in 2026 and about $1 trillion in 2030.

If the FCA lifts the ban, prediction market platforms could face legal challenges similar to those they face in the US. In the US, state gambling regulators have sued Kalshi and Polymarket over sports-event contracts. New Jersey recently appealed its case against Kalshi to the US Supreme Court, with a final decision pending in a jurisdictional dispute between state and federal authorities.