FCA confirms prediction market talks as Kalshi and Polymarket eye Britain

The Financial Conduct Authority has confirmed it is engaging with prediction market operators as platforms including Kalshi and Polymarket explore potential UK entry.

Speaking at the regulator’s annual public meeting on 6 October, markets executive director Simon Walls said: “We are engaging, we are interested in their plans for the UK,” according to Financial News.

The comments confirm regulatory discussions. They do not establish that either platform has secured authorisation or that Britain has agreed a new prediction market framework.

Who would regulate prediction markets?

Prediction markets mean users trade contracts linked to future outcomes. This includes election results, sporting events or economic indicators.

Britain’s regulation depends on the product. The FCA’s current perimeter report places prediction markets linked to sporting and political outcomes within the Gambling Commission’s remit. Contracts referencing financial or certain climatic events fall within the FCA’s remit.

"In an era of increasing technological change and AI adoption, defining what is inside and outside our perimeter is ever more complex. It is important that consumers and other stakeholders understand what is regulated, and what is not." - FCA current perimeter report.

However, the FCA considers the financial prediction products it has examined to be binary options. These remain subject to its permanent ban on sales to retail consumers. The regulator says it will consider whether further work on access or clarification is needed.

The Gambling Commission has separately said current prediction market models appear comparable to betting exchanges and could require a betting intermediary licence. Calling a product “trading” does not determine its legal classification.

What would change for consumers?

Gambling and financial services have different safeguards. The regulatory route is important, therefore.

Licensed online betting operators must participate in GAMSTOP self-exclusion. They must also implement customer interaction processes designed to identify and address gambling harm.

Any future financial-services route would need to explain which protections apply. They would also need to decide  and whether comparable safeguards are required. There is currently no announced framework establishing how GAMSTOP or gambling-specific interventions would work for FCA-regulated prediction contracts.

For now, financial classification presents its own barrier. The FCA’s binary-options ban prohibits retail sale, marketing and distribution. This reflects concerns about consumer harm.

Could Britain avoid the American legal battle?

In the US, the Commodity Futures Trading Commission claims exclusive jurisdiction over event contracts. It has sued states including Arizona, Connecticut and Illinois over attempts to regulate CFTC-registered platforms.

Great Britain already has a single overarching sports-betting framework. This is unlike America’s state-by-state system. That difference may simplify oversight, but it does not establish a clear timetable for authorisation or guarantee fewer legal disputes.

Germany’s GGL has also joined European regulators in warning about prediction-market risks. This includes addiction, manipulation and inadequate player protection. Its statement offers no endorsement of a UK financial-regulation model.