FCA Reviews Ban on Prediction Markets – But GC Rules Still Apply

The Financial Conduct Authority has held talks with trading platforms about easing the UK’s long-standing ban on financial prediction markets, according to reporting by The Times. But whatever the FCA decides about financial contracts, anyone offering sports or political prediction markets to British users will still need to clear a separate hurdle: a Gambling Commission licence.

What’s actually changed

Britain’s Financial Conduct Authority 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.

The FCA treats contracts linked to financial and certain weather events as binary options, whose sale to retail investors has been prohibited since 2019.
That prohibition has not been lifted:
the regulator reportedly held industry talks but has announced no policy reversal or rulemaking timetable, and sports and political prediction contracts fall under Gambling Commission oversight rather than direct FCA supervision.

The renewed interest follows an FCA discussion paper.
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.

Crucially for anyone thinking of using a prediction platform, the regulatory split matters.
The regulator set out in a March 2026 report that contracts referencing financial or certain climatic events fall to it, while sports and political outcomes belong to the Gambling Commission, which said in February 2026 that commercial prediction markets meet the nation’s legal definition of gambling and would require a betting intermediary licence.

This is the same authorisation held by betting exchanges such as Betfair Exchange and Matchbook, meaning a platform offering a full range of markets would need both.

The interest is being driven by growing consumer demand for these products.
Bernstein expects total prediction-market trading volume to rise from $51 billion in 2025 to $240 billion this year, with Kalshi and Polymarket valued at $22 billion and $21 billion respectively, while Coinbase, Robinhood and DraftKings have also introduced prediction products.

The FCA has weighed lifting the restriction as UK consumers increasingly access overseas platforms including market leaders Kalshi and Polymarket.

What it means for you

If you’ve noticed adverts or social media chatter about prediction markets, the practical position for now hasn’t shifted. Nothing here changes the ban on financial-style binary options being sold to UK retail customers, and there’s no confirmed date for that to change. What has become clearer is that a platform can’t simply badge a betting-style product as an “investment” to sidestep gambling rules: if the contract is about a sporting or political outcome, the Gambling Commission’s rules on licensing, complaints handling and player protection apply, just as they would to a conventional bookmaker or exchange. If you use an unlicensed overseas platform for these contracts, you’re likely to be outside UK safeguards.
Overseas platforms may leave British users without domestic complaint procedures, compensation coverage or regulatory protection.

For anyone tempted by sites like Kalshi or Polymarket for sports or political outcomes, the same basic checks that apply to any casino or betting site are worth doing: confirm whether the operator holds a UK Gambling Commission licence before depositing money, since that licence is what gives you access to a formal complaints route and ultimately independent dispute resolution if something goes wrong.

The bigger picture

This story sits at the messy overlap between financial regulation and gambling law that UK regulators are only just starting to untangle.
Prediction markets have exposed an increasingly awkward fault line between financial regulation and gambling regulation.
While Britain edges towards possibly loosening its stance, other jurisdictions are moving the opposite way:
the Autorité Nationale des Jeux ordered French ISPs to block Polymarket in July after earlier geoblocking proved susceptible to circumvention.
As one analysis put it,
France is trying to make prohibition more effective, while Britain may be asking whether prohibition remains the right policy at all.

For UK players, the takeaway is that regulatory clarity is still some way off. Until the FCA publishes anything concrete, the safest assumption is that the Gambling Commission’s existing licensing and player-protection framework is what governs any prediction product resembling a bet on a sporting or political event – regardless of how a platform chooses to describe itself.

Sources

• CoinDesk – UK regulator weighs easing financial prediction market ban: Times
• FinTelegram – UK Prediction Market U-Turn? FCA Rethinks Binary Options Ban
• crypto.news – FCA weighs easing UK prediction market ban
• News.Bitcoin.com – UK Regulator Revisits the 2019 Ban Blocking Prediction Markets
• iGaming Express – FCA to Review UK Binary Options Ban