The UK’s Financial Conduct Authority (FCA) reportedly has reached out to prediction market companies as part of discussions over whether the regulator would loosen a ban for retail investors, in place since 2019.
According to a Friday report from The Times, the FCA is weighing lifting a ban on prediction market platforms like Polymarket and Kalshi for UK-based retail investors. Because prediction markets offer binary options on event contracts, such as for sports, politics and the weather, they fall under an April 2019 ban imposed by the FCA, in which companies were “prohibited from selling, marketing or distributing binary options to retail consumers.”
“Binary options are gambling products dressed up as financial instruments,” said the FCA’s executive director of strategy and competition, Christopher Woolard, at the time of the ban.
According to The Times report, many retail investors based in the UK have been using virtual private networks (VPNs) to bypass the country’s restrictions on prediction markets and execute trades on Kalshi and Polymarket, both with operations in the US. Bernstein Research speculated in April that the total prediction market industry could rise to about $240 billion in trading volume in 2026 and $1 trillion in 2030.
Should the FCA overturn the 2019 ban, prediction market platforms like Kalshi and Polymarket could face similar challenges as they are dealing with in the US, where individual state gaming authorities are filing lawsuits against the companies over sporting event contracts. Last week, New Jersey officials petitioned the Supreme Court to hear its case against Kalshi, potentially leading to clarification between state and federal authorities over prediction markets.
Related: Kalshi issues first lifetime ban for Republican politician over insider bets