FCA holds talks over easing UK ban on retail prediction markets

The Financial Conduct Authority has reportedly held discussions with trading platforms about potentially relaxing the UK’s ban on retail access to financial prediction markets.

The talks could eventually open a route into Britain for platforms such as Kalshi and Polymarket, which allow users to trade contracts linked to whether events will happen.

However, no policy change has been announced. The current binary options ban remains in force, while gambling legislation creates a separate regulatory hurdle for some event contracts.

FCA takes soundings from trading platforms

According to The Times, the FCA has taken soundings on whether its rules should continue preventing retail consumers from accessing financial prediction markets.

Industry representatives have reportedly argued that UK consumers are already reaching overseas platforms through virtual private networks. They claim keeping the activity offshore leaves users without the protections of a regulated British market. The FCA prohibited firms from selling, distributing or marketing binary options to retail consumers in 2019. It described the products as inherently flawed and said the ban would reduce fraud and significant consumer losses.

Prediction contracts commonly pay out according to a yes-or-no outcome. This means some may fall within the definition of a binary option, depending on their structure and subject.

Existing ban has not been withdrawn

The FCA addressed the issue in discussion paper DP25/3, published in December 2025 during a wider examination of consumer access to investments.

It stated:

“Depending on how it is structured, this type of investment may meet the definition of a binary option.”

The paper asked whether regulation should focus on products’ risks and characteristics instead of their labels. It did not propose specific rules allowing prediction markets to serve retail customers.

The FCA has previously reconsidered restrictions on emerging investments. Retail access to crypto exchange-traded notes was restored in October 2025, subject to protections including risk warnings, appropriateness assessments and a cooling-off period.

This provides a possible precedent, but it does not mean prediction markets will receive equivalent treatment.

Gambling licence may also be required

FCA approval would not necessarily provide unrestricted access to the UK market.

In a February 2026 parliamentary answer, the government said any prediction market operating in Great Britain would require a Gambling Commission licence when its products met the legal definition of gambling.

A platform enabling customers to bet against one another would typically need a remote betting intermediary licence. The government also said the Commission would assess applications individually and examine whether the applicant was suitable to hold a licence.

Responsibility could therefore depend on the event involved. Financial prediction contracts may fall within the FCA’s remit, while markets involving sport, politics or other non-financial outcomes could be treated as gambling.

Any operator offering a broad selection of markets may consequently have to satisfy requirements imposed by both regulators.

For now, reports of discussions signal that the FCA is willing to examine the issue, rather than confirmation that Britain’s prediction-market ban is ending.