Britain’s Financial Conduct Authority (FCA) has held talks with trading platforms about potentially easing its ban on financial prediction markets for retail investors, according to a report by The Times.
Prediction markets let users take yes-or-no positions on the outcome of future events across various categories, including economics, sports, and weather. The FCA treats contracts linked to financial and certain weather events as binary options, whose sale to retail investors has been prohibited since 2019.
The regulator has weighed lifting the restriction as U.K. consumers increasingly access overseas platforms including market leaders Kalshi and Polymarket.
The FCA’s public position continues to support that restriction. Its latest perimeter report said the ban remained appropriate because of the speculative nature of the contracts and the risk of consumer harm, while leaving open the possibility of further work on access or clarification of the regulatory boundary.
Industry participants have been lobbying for a change, presenting officials with evidence that millions of Brits are using overseas prediction platforms, The Times reports. Some consumers bypass geographic restrictions using virtual private networks (VPNs), leaving them outside UK consumer protections.
The review follows an FCA discussion paper on retail investment rules, which said prediction products may fall within the binary-options ban, and asked whether speculative investments should be regulated according to their risks rather than their product labels.
Demand has surged for prediction markets. Bernstein expects total prediction-market trading volume to rise from $51 billion in 2025 to $240 billion this year, according to figures cited by The Times.
Kalshi and Polymarket have been valued at $22 billion and $21 billion, respectively, while Coinbase, Robinhood and DraftKings have also introduced prediction products.
Any platform seeking to offer a broad range of contracts in the U.K. would face two regulatory 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 Times reports.
The FCA did not immediately respond to CoinDesk’s request for further commewnt