Britain Financial Conduct Authority has held talks with trading platforms about easing its 2019 ban on retail access to financial prediction markets, The Times reported this week. The review comes as British consumers increasingly bypass the restriction to trade on overseas platforms such as Kalshi and Polymarket, often through virtual private networks that leave them outside UK consumer protections.
Why the ban is being reconsidered
The FCA treats contracts tied to financial events and some weather outcomes as binary options, a product class whose sale to retail investors has been prohibited since April 2019. At the time, the regulator executive director of strategy called binary options gambling products dressed up as financial instruments, and the ban was meant to end a string of retail losses on short-dated wagers.
The practical problem is that the ban no longer stops anyone determined to trade. Millions of Brits use overseas prediction platforms, industry participants told officials, presenting evidence in lobbying meetings. The FCA public position still supports the restriction, but its own April discussion paper on retail investment rules asked whether speculative products should be regulated by their actual risks rather than their product labels. A regulatory-perimeter meeting with HM Treasury the same month confirmed work was underway on access to prediction products.
Any platform seeking to offer a broad UK market would face two hurdles. The FCA would need to permit financial event contracts, while sports and political markets fall under the Gambling Commission and would require a gambling licence. The UKGC signalled in February that commercial prediction markets dealing in non-financial events may need a betting intermediary licence, similar to what existing betting exchanges hold.
The market has outgrown the rule
Demand has surged since the ban was written. Bernstein analysts expect total prediction market trading volume to rise from $51 billion in 2025 to roughly $240 billion this year, with a longer-run estimate of $1 trillion by 2030. Kalshi and Polymarket have been valued at $22 billion and $21 billion respectively, and mainstream brokers including Coinbase, Robinhood and DraftKings have launched prediction products of their own.
Combined monthly volumes on the two US leaders climbed from under $5 billion in September 2025 to about $24 billion by April 2026, according to industry figures cited in earlier reporting. A slice of that activity comes from users in jurisdictions where the platforms are not supposed to be reachable at all.
| Market signal | Figure |
|---|---|
| Global prediction volume, 2025 | $51 billion |
| Expected 2026 volume | $240 billion |
| Kalshi valuation | $22 billion |
| Polymarket valuation | $21 billion |
| UK retail binary options ban | In force since April 2019 |
Enforcement elsewhere points the other way
Britain is not the only jurisdiction wrestling with the question, and the approaches diverge sharply. France took the opposite path: the gambling regulator ANJ concluded Polymarket geoblocking had been circumvented and ordered internet providers to block the site outright in July. The FCA rethink, if it leads anywhere, would make the UK one of the first major markets to move from prohibition toward licensed access rather than escalating enforcement.
No formal rule change has been proposed, and any relaxation would follow a public consultation. The reported talks still mark a shift: the debate is no longer only about whether retail investors should be protected from event contracts, but whether the protection is doing anything at all beyond pushing traders offshore to platforms that owe them no duty of care.
In the United States, the sector has grown around a clear CFTC designation for Kalshi, though state regulators and courts continue to fight over where event contracts end and gambling begins. New Jersey petitioned the Supreme Court to hear its case against Kalshi last week, and the Tenth Circuit this week let Utah pursue action against the platform while an appeal continues.
The FCA declined to comment beyond its published position. For British traders nothing has changed yet: the binary options ban remains fully in force, and any platform serving them from abroad is doing so outside the FCA perimeter.
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