FCA Weighs Easing UK's Financial Prediction Market Ban
The Financial Conduct Authority (FCA) has held talks with trading platforms about easing its ban on financial prediction markets for retail investors, according to a report by The Times covered by CoinDesk on September 7, 2026.
Prediction markets let users take yes-or-no positions on the outcome of future events across categories such as economics, sports and weather.
The FCA treats contracts tied to financial instruments and certain weather events as binary options, whose sale to UK retail investors has been banned since 2019 due to concerns about consumer harm and the products' "gambling-like nature."
Industry participants have lobbied the regulator for a change, presenting evidence that millions of UK consumers already use virtual private networks to reach overseas prediction platforms such as Kalshi and Polymarket, leaving them outside domestic consumer protections, according to the same report.
The Discussion Paper Behind The Review
The talks follow the FCA's own DP25/3 discussion paper on expanding consumer access to investments, opened on December 8, 2025 and closed to feedback on March 6, 2026.
The paper flagged "horizon contracts", products letting consumers speculate on outcomes such as macroeconomic indicators, politics or event-based forecasts, as potentially meeting the definition of a banned binary option, and asked whether speculative products should be regulated by their underlying risk rather than by their label.
The regulator's public position has not changed. Its latest perimeter report maintained that the ban remains appropriate given the speculative nature of the contracts, while leaving the door open to further work on access to these products.
A Two-Licence Route For Any UK Launch
Even if the FCA relaxes the rules, any operator wanting to offer a full range of UK prediction contracts would still need to clear two separate hurdles.
Financial event contracts would need an FCA authorisation, while contracts on sport and politics fall under the Gambling Commission and would require a betting intermediary licence, the kind already held by UK exchanges such as Matchbook.
That dual structure means any change is unlikely to open a single, simple route to market.
Demand has grown quickly regardless: analysts at Bernstein expect global prediction market trading volume to rise from $51 billion in 2025 to $240 billion this year, with Kalshi and Polymarket both valued above $20 billion.
UK readers can follow how the rules affect licensed online betting sites as the review develops, with further updates on our Gambling.com news page.
