UK regulator talks about easing ban on retail financial prediction markets

FCA explores possible easing of prediction‑market ban

The UK Financial Conduct Authority (FCA) has held talks with trading platforms about possibly relaxing the 2019 ban that stops retail investors from buying financial prediction contracts. These contracts, often called binary options, let users bet on yes‑or‑no outcomes of events such as economic data releases.

Why the ban is being reconsidered

British consumers are increasingly using overseas platforms like Kalshi and Polymarket, sometimes via VPNs, to access prediction markets that are not protected by UK rules. Industry groups have told the FCA that millions of UK residents are using these services.

Regulatory hurdles for UK platforms

To offer a full range of prediction contracts in the UK, a platform would need FCA permission for contracts linked to financial events and a Gambling Commission licence for sports or political markets.

Industry and market context

• Bernstein forecasts that global prediction‑market trading volume could grow from $51 billion in 2025 to $240 billion in 2026.
• Kalshi is valued at about $22 billion and Polymarket at $21 billion.
• US‑based firms such as Coinbase, Robinhood and DraftKings have also launched prediction products.

Official stance

The FCA’s latest perimeter report says the ban remains appropriate because the contracts are highly speculative and could harm consumers, but it leaves open the possibility of future work on access or clarification of the regulatory boundary.

What could happen next

The regulator may continue its consultation with platforms and could decide to adjust the rules, but no final decision has been announced.

Sources

• CoinDesk