UK regulator considers overturning retail ban on prediction markets

The UK’s Financial Conduct Authority is reportedly in discussions about potentially lifting a ban on prediction market platforms for retail investors, which has been in place since 2019.

According to a report from The Times, the FCA has reached out to companies like Polymarket and Kalshi as part of its review. The 2019 ban prohibits firms from selling, marketing, or distributing binary options to retail consumers, a category that includes event-based prediction contracts.

The regulator initially imposed the ban, with a former executive calling such products “gambling products dressed up as financial instruments.” Despite the restriction, the report notes that many UK-based retail investors have used VPNs to access these platforms.

A potential policy reversal could open the UK market but may also introduce regulatory challenges similar to those in the US, where state authorities have filed lawsuits over sporting event contracts.