UK Regulator Considers Easing Ban on Financial Prediction Markets

Britain’s Financial Conduct Authority (FCA) has reportedly discussed the possibility of relaxing its ban on financial prediction markets with trading platforms, as more U.K. consumers turn to overseas services such as Kalshi and Polymarket, according to The Times.

Prediction markets allow users to wager on binary outcomes of future events, covering areas such as economic data, sports and weather. The FCA classifies contracts tied to financial events and certain weather outcomes as binary options, which have been barred from being marketed or sold to retail investors in the U.K. since 2019.

The regulator is now considering whether that restriction should be reconsidered as British users increasingly gain access to international prediction-market platforms, including Kalshi and Polymarket.

Despite the reported discussions, the FCA has not publicly changed its stance. In its most recent perimeter report, the regulator said the existing ban remains justified because these products are highly speculative and could expose consumers to financial harm. At the same time, it indicated that additional work could be carried out to clarify the regulatory framework or examine how access to such products should be handled.

Industry representatives have been pushing for the rules to change, reportedly presenting the FCA with evidence that millions of people in Britain are already using overseas prediction platforms. Some users reportedly get around geographic restrictions through virtual private networks (VPNs), potentially leaving them without the consumer protections that apply to regulated U.K. services.

The latest review follows an FCA discussion paper examining retail investment regulations. That document suggested some prediction products could fall within the existing binary-options prohibition and questioned whether speculative investments should instead be regulated according to the risks they present rather than simply being classified by product type.

Interest in prediction markets has expanded rapidly. Bernstein forecasts that global prediction-market trading volume could increase from $51 billion in 2025 to $240 billion this year, based on figures cited by The Times.

The sector has also attracted substantial valuations. Kalshi and Polymarket have reportedly been valued at $22 billion and $21 billion, respectively. Major financial and betting companies, including Coinbase, Robinhood and DraftKings, have also launched prediction-market products.

Any company seeking to offer a wide selection of prediction contracts to U.K. customers would face two separate regulatory regimes.

The FCA would first need to allow financial event contracts for retail investors. Meanwhile, contracts involving sports and politics would fall under the authority of the Gambling Commission and would require an appropriate gambling license, according to The Times.

The FCA did not immediately respond to CoinDesk’s request for additional comment.

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