UK FCA Reviews Retail Prediction Market Ban

The UK Financial Conduct Authority (FCA) has reportedly discussed whether to relax its 2019 ban on retail access to financial prediction markets. No rule has changed, and the FCA still supports the ban. Since 2 April 2019, firms operating in or from the UK have been prohibited from selling, marketing or distributing binary options linked to financial and certain climate-related events to retail consumers. The FCA estimated the ban could save consumers up to £17 million a year. Industry participants are seeking reform, arguing that millions of UK residents already access overseas prediction markets through virtual private networks without UK consumer protection. The FCA’s December discussion paper suggested that speculative products could be assessed by their risk and return profiles rather than their labels. The review comes as prediction markets expand, with Bernstein estimating global trading volume could reach $240 billion in 2026 and $1 trillion by 2030. Any UK reform would raise questions about authorisation, capital requirements, know-your-customer and anti-money-laundering controls, and eligible event types. Financial prediction markets would fall under the FCA, while sports and political contracts would remain under the Gambling Commission. Platforms offering both categories could therefore need both an FCA authorisation and a gambling licence. The development could eventually benefit regulated event-contract platforms such as Kalshi, while Polymarket and other overseas platforms would still face market-access and compliance issues. For crypto traders, this is a regulatory signal rather than an immediate market-opening decision, so the direct price impact on cryptocurrencies is likely to remain limited.