Prediction markets could get a UK route if the FCA revisits the binary options ban

The Financial Conduct Authority (FCA) is due to revisit consumer access to investments in September, and that puts the UK’s 2019 retail binary options ban back on the table. For prediction market operators, the practical question is whether the FCA keeps treating financial-market contracts as speculative products, or opens a path that can actually be licensed.

1. The retail binary options ban has been in place since 2019, after the FCA said consumers could suffer significant financial losses and might not properly understand the risks involved. That matters because prediction markets offering financial markets are currently grouped by the FCA with speculative products.
2. On paper, that classification is the problem. The FCA says these contracts have a “speculating, gambling-like nature” and present a high risk of consumer harm, which has left them under a permanent ban.
3. The regulator’s Discussion Paper on expanding consumer access to investments, opened in December 2025, explicitly covered speculative products. The FCA said it would consider “whether further work on access to these products is needed,” and after the paper closed in March it committed to issue an official statement on the feedback in Q3.
4. Once that statement lands, the FCA said it “may consult on the issues discussed in the paper in due course.” That wording is doing a lot of work here: it does not reopen the market by itself, but it does leave the door open for a formal consultation.
5. According to The Times, “multiple stakeholders” have already made representations to FCA-linked officials, arguing that prediction markets have become prominent in the UK and pointing to “millions of consumers using VPNs to access prediction markets overseas.” In other words, the demand is already there; the question is whether it moves into regulated channels or stays offshore.

Even if the UK does end up softening the binary options framework, firms wanting to launch prediction markets there would still face a two-pronged licensing route. For PSPs, acquiring teams, and bank partners, that means the market is not just a product question; it is a licensing and categorisation question first.