CoinDesk
The UK Financial Conduct Authority has held talks with trading platforms about potentially easing its 2019 ban on retail access to financial prediction markets. These products let users take yes-or-no positions on future economic, sports and weather outcomes, as UK consumers increasingly turn to overseas platforms such as Kalshi and Polymarket. Bernstein expects total prediction-market trading volume to rise from $51 billion in 2025 to $240 billion this year.
Why it matters
The FCA's public position still supports the restriction. Its latest perimeter report said the ban remained appropriate because of the contracts' speculative nature and the risk of consumer harm, while leaving open further work on access and the regulatory boundary.
The policy question is increasingly practical. Industry participants have presented officials with evidence that millions of Britons use overseas prediction platforms, while some consumers bypass geographic restrictions through VPNs and remain outside UK consumer protections. The review follows an FCA discussion paper that asked whether speculative investments should be regulated by their risks rather than their product labels.
Market impact
A broad UK offering would face two regulatory hurdles. Financial event contracts would require FCA permission, while sports and political markets would fall under the Gambling Commission and require a gambling licence.
The commercial stakes are rising alongside demand. Kalshi and Polymarket have been valued at $22 billion and $21 billion, respectively, while Coinbase, Robinhood and DraftKings have introduced prediction products. The regulatory question is whether the UK treats these markets as prohibited binary options, supervised financial contracts or products split across both regimes.
Frequently asked questions
-
Why is the FCA reconsidering retail access to prediction markets?
UK consumers are increasingly using overseas platforms such as Kalshi and Polymarket, while an FCA discussion paper asked whether speculative products should be regulated by risk rather than by label.
-
What is the FCA's current public position on the ban?
The FCA still supports the restriction, citing the speculative nature of the contracts and the risk of consumer harm. It has left open further work on access and the regulatory boundary.
-
How much could prediction-market volume grow?
Bernstein expects total prediction-market trading volume to rise from $51 billion in 2025 to $240 billion this year.
-
What approvals would a UK prediction-market platform need?
Financial event contracts would require FCA permission. Sports and political markets would require a Gambling Commission licence.
-
How large are Kalshi and Polymarket by valuation?
Kalshi and Polymarket have been valued at $22 billion and $21 billion, respectively.
CryptoSlate
Crypto Capital Venture
CoinTelegraph
TheBlock