TLDR
- The UK’s Financial Conduct Authority is contacting trading platforms about lifting its 2019 ban on prediction markets.
- British consumers have been using VPNs to access US platforms like Kalshi and Polymarket despite the restriction.
- The FCA originally classified prediction markets as binary options, citing risks to retail investors.
- Even if the ban lifts, operators would still need separate gambling licenses to run markets on events like elections.
- US prediction market volume hit $51 billion last year and could reach $240 billion in 2026.
The UK’s Financial Conduct Authority has started talking to trading platforms about whether to lift its ban on prediction markets. The Times first reported the news on September 7, 2026.
The regulator has kept prediction markets off limits in Britain since 2019. That year, the FCA classified these products as binary options trades, meaning bets on whether a specific event will happen or not.
Officials at the time said retail investors faced heavy losses and often did not understand what they were buying. The ban has stayed in place for seven years.
But the market has changed since then. More British consumers are now using American platforms such as Kalshi and Polymarket to place these kinds of trades.
Many of these users rely on VPNs to get around the UK restriction. This lets them access platforms that are not designed for, or regulated in, the British market.
Industry Pressure Builds on Regulators
People in the trading industry say the ban has not worked as intended. They argue it has pushed UK consumers toward offshore platforms with no local oversight.
One City source told The Times that prohibitions like this tend to be ineffective. The source said regulators meant to protect consumers are instead pushing them toward operators with no regulatory standards at all.
Multiple stakeholders have presented evidence to FCA officials as part of the lobbying push. This comes after the FCA opened a wider consultation earlier this year asking for industry views on speculative products.
The FCA has not changed its position entirely. In its latest paper, the regulator repeated that purely speculative products tend to cause harm to consumers rather than support growth in the real economy.
What Happens If the Ban Lifts
Removing the binary options ban would not open the door to every type of prediction market right away. Companies wanting to offer markets on political outcomes, like election results, would still need separate gambling licenses.
That means any changes to UK rules would depend on cooperation between financial regulators and gambling authorities. Both would need to sign off before operators could legally serve British customers.
The situation in the United States shows how fast this market can grow once it gets a foothold. Trading volume on US prediction markets reached $51 billion last year.
Forecasts point to $240 billion in trading volume for 2026. Some estimates suggest the market could hit $1 trillion by 2030.
Even with that growth, US regulators have not settled who should oversee prediction markets. The debate centers on whether the Commodity Futures Trading Commission or individual state gaming laws should apply.
A recent ruling from the ninth circuit court sided with states, affirming their power to treat prediction markets as gambling. Legal experts expect the dispute to eventually reach the Supreme Court.
For now, UK operators are watching closely. Any future prediction market in Britain would need clearance from both financial regulators and gambling authorities before launching.
The FCA has not set a timeline for a final decision. Industry groups continue pushing for movement given the scale of consumer activity already happening on unregulated overseas platforms.
