The UK Financial Conduct Authority (FCA) has held discussions with trading platforms about whether to relax its 2019 retail ban on financial prediction markets, according to The Times. The current regime treats contracts tied to financial and weather outcomes as binary options, which cannot be sold to retail investors because regulators consider them excessively speculative and potentially harmful.
The review is driven by an exodus of UK users to offshore platforms such as Kalshi and Polymarket. Many British customers are reported to be using virtual private networks to bypass geographic restrictions, leaving them outside the UK's consumer protection framework. Industry participants argue that the existing ban may be pushing users toward unregulated venues rather than preventing them from trading.
The market's rapid growth has intensified the debate. Bernstein projects that global prediction market trading volume will jump from $51 billion in 2025 to $240 billion in 2026. Kalshi and Polymarket are reportedly valued at about $22 billion and $21 billion respectively, while Coinbase, Robinhood and DraftKings have also launched prediction products.
Any platform seeking to offer a broad range of UK prediction markets would still face a split regulatory structure: financial event contracts would require FCA approval, while sports and political markets would need a licence from the Gambling Commission. The FCA has not announced a formal policy change, but its discussions suggest regulators are reconsidering whether controlled domestic access may offer better consumer protection than the current offshore migration.
