UK FCA weighs lifting 2019 ban on retail prediction markets, report says

The UK’s Financial Conduct Authority (FCA) has reportedly contacted prediction market companies as it considers whether to loosen the retail ban in place since 2019. For PSPs and operators, the practical question is simple: if the FCA changes course, platforms like Polymarket and Kalshi could move from being structurally blocked in the UK to being a live onboarding and acquisition problem.

1. According to a Friday report from The Times, the FCA is weighing whether to lift the ban for UK-based retail investors on prediction market platforms such as Polymarket and Kalshi. The report says the regulator has reached out to companies as part of those discussions.
2. The current restriction comes from an April 2019 FCA ban, under which companies were “prohibited from selling, marketing or distributing binary options to retail consumers.” Prediction markets fall under that framework because they offer binary options on event contracts, including sports, politics and the weather.
3. At the time of the ban, the FCA’s executive director of strategy and competition, Christopher Woolard, said: “Binary options are gambling products dressed up as financial instruments.” That framing matters because the regulatory label determines whether a product sits closer to gambling oversight or financial services rules.
4. The Times also reported that many UK retail investors have been using VPNs to bypass the country’s restrictions and trade on Kalshi and Polymarket, both of which operate in the US. In other words, the demand has not disappeared; it has just been pushed around by geography and access controls.
5. Bernstein Research speculated in April that the prediction market industry could reach about $240 billion in trading volume in 2026 and $1 trillion in 2030. If the FCA does lift the ban, that scale would make the UK a market worth watching, especially for providers trying to decide whether event-contract flows belong on their risk map.

There is also a transatlantic angle here. If the FCA opens the door, Kalshi and Polymarket could still face the same kind of regulatory friction they already deal with in the US, where individual state gaming authorities have filed lawsuits over sporting event contracts. Last week, New Jersey officials petitioned the Supreme Court to hear its case against Kalshi, which could clarify the boundary between state and federal authority over prediction markets.