FCA Considers Easing Ban on Prediction Markets
The UK regulator is talking with trading platforms about event contracts, while Britons are turning to Kalshi and Polymarket. The question is whether the 2019 retail ban still makes sense.
Key Takeaways
- The UK regulator FCA is discussing a possible easing of the ban on prediction markets for retail investors.
- The FCA has banned these products for retail investors since 2019, but is once again looking into whether the rules still fit today’s market.
- Rising demand and the use of foreign platforms are putting pressure on the regulator to rethink the rules.
The UK regulator FCA has reportedly held talks with trading platforms, according to The Times about a possible easing of the ban on prediction markets for retail investors. That stands out because the regulator still publicly says the current restriction is appropriate because of the speculative nature of these products and the risk of consumer harm.
Ban Still Formally in Place
The FCA treats contracts on financial events and certain weather events as binary options. Selling them to retail investors has been banned since 2019. In its most recent perimeter report, the regulator stuck to that position, but it did leave room for further research into access to these products or a tighter definition of the rules.
According to The Times, the FCA is now once again looking at whether that ban still fits today’s market. That comes as British consumers increasingly turn to foreign platforms like Kalshi and Polymarket. Industry players have also pointed out to the regulator that millions of Britons would be using these platforms.
Pressure From Growing Demand
Interest in prediction markets has risen sharply lately. Bernstein expects total trading volume in this market to rise from $51 billion (€43.9 billion) in 2025 to $240 billion (€207 billion) this year, The Times reports. Kalshi and Polymarket were valued at $22 billion (€18.9 billion) and $21 billion (€18.1 billion), respectively, showing how much capital and attention has flowed into this segment.
Big names like Coinbase, Robinhood, and DraftKings have also launched their own prediction products. For UK providers, though, the path is still complicated. Anyone wanting to offer a broad range in the UK has to deal with two regulators: the FCA for financial event contracts and the Gambling Commission for sports and political markets.
Why This Matters
For European crypto and fintech readers, this matters because prediction markets are increasingly overlapping with crypto infrastructure, trading apps, and new forms of online speculation. The debate in the UK shows regulators trying to draw a line between innovation and consumer protection, while users are already looking for access to these products through foreign platforms. That could also become an important reference point for other European markets.
