UK Regulator Weighs Lifting Prediction Markets Ban

The UK’s Financial Conduct Authority (FCA) is reportedly considering whether to lift its ban on prediction markets for retail investors, according to The Times.

The FCA has reached out to prediction market companies as part of discussions about changing the restrictions, which have been in place since 2019. Prediction market platforms offer contracts tied to events including sports, politics, and weather. Under the FCA’s existing rules, these products fall under the UK’s ban on selling, marketing, and distributing binary options to retail consumers.

The FCA introduced the ban in 2019 after finding evidence of consumer harm and poor conduct among firms offering binary options. The regulator has previously described the products as difficult for consumers to value and said they carried significant risks.

According to The Times, UK retail traders are increasingly using VPNs to access overseas prediction market platforms, including Polymarket and Kalshi. That has raised questions over whether keeping the market outside the UK’s regulatory framework could leave consumers with fewer protections.

The prediction market sector has also expanded rapidly. Bernstein Research estimated in April that global trading volume could reach around $240 billion in 2026 and $1 trillion by 2030.

Elsewhere, the perimeter is being drawn in real time. New Jersey has petitioned the US Supreme Court to hear its case against Kalshi over sports event contracts, and Gibraltar's Prediction Market Regulations took effect on July 13, carving the sector out of the territory's Gambling Act and requiring each contract to be certified by its Gambling Authority.

The FCA has not confirmed whether it plans to lift the ban. Any change would also need to address how prediction markets fit within the UK’s financial services and gambling rules.