Britain’s Financial Conduct Authority has held talks with trading platforms about easing its ban on retail access to financial prediction markets, according to a September 5, 2026 report in The Times. No rule has changed.
Key Points
- The FCA has discussed lifting the 2019 prohibition on binary options, the category that captures most financial prediction market contracts.
- British consumers are reaching Kalshi and Polymarket through VPNs, which leaves their trades outside UK consumer protections.
- Bernstein projects prediction market volume of $240 billion in 2026, up from $51 billion in 2025.
- Any UK launch would need FCA permission for financial contracts plus a Gambling Commission license for sports and political markets.
FCA reopens a ban it made permanent
The FCA treats contracts tied to financial outcomes and certain weather events as binary options. Those products have been off-limits to retail clients since PS19/11 took effect. Prediction markets let users take yes-or-no positions on future events across economics, sports and weather, and the contract mechanics are what put them inside that definition.
The regulator’s public position still backs the restriction. Its latest perimeter report called the ban appropriate given the speculative nature of the contracts and the risk of consumer harm, while leaving room for further work on access and on clarifying the regulatory boundary. A December 2025 discussion paper went further, saying purely speculative products “tend to cause net harm to consumers” and asking whether such investments should be regulated according to their risks rather than their product labels.
'UK weighs lifting ban on US-style prediction markets. The FCA has held talks with trading platforms after a surge in Britons bypassing UK rules to use American sites such as Kalshi and Polymarket'https://t.co/aAI9K4CZHY
— Chris Fawcett (@chrisgambler247) September 6, 2026
Britons are already trading, without UK cover
Industry participants pressing for change have shown officials evidence that millions of Britons use overseas prediction platforms. Some route around geographic blocks using virtual private networks, which puts them outside UK consumer protections.
Nothing about that has shifted today. The prohibition remains live, and a position opened on an overseas venue through a VPN carries no UK recourse.
Two regulators stand between platforms and a UK launch
A broad UK offering would clear two gates. The FCA would have to permit financial event contracts, and sports and political markets sit with the Gambling Commission, which requires a gambling license. A financial-only permission would not reach sports contracts.
The commercial stakes are large. Bernstein projects total prediction market volume climbing from $51 billion in 2025 to $240 billion in 2026. Kalshi has been valued at $22 billion and Polymarket at $21 billion, and Coinbase, Robinhood and DraftKings have each added prediction products.
Why It Matters?
The talks shift the question from whether these contracts are legal in Britain to which regulator gets to authorize them. The 2019 rule was written for binary options sold by offshore brokers, and it now catches venues carrying multibillion-dollar valuations and mainstream brokerage distribution. That distance between the rule’s original target and its current reach is what the discussion paper opened up when it asked regulators to look at risk profiles.
What the record supports is narrow. Talks took place and the FCA has raised the question in public, but the perimeter report still endorses the ban and no policy statement has been issued. The open items are specific: whether a financial permission could arrive without a parallel Gambling Commission route, how positions UK residents already hold on overseas venues would be treated, and what happens to platforms that served VPN traffic while the prohibition stood.
