UK regulator weighs easing ban on US-style prediction markets
The UK Financial Conduct Authority is reportedly considering lifting its ban on prediction markets for retail investors. The ban has been in place since 2019 under an FCA directive that treated financial prediction contracts as binary options. The regulator has reportedly reached out to prediction market companies as part of its discussions. No timeline or specific proposal details were disclosed. The move comes as British users increasingly access overseas platforms including Kalshi and Polymarket.
Kalshi and Polymarket now face a split global landscape where UK access may open just as EU doors slam shut. The European Securities and Markets Authority has classified prediction market contracts as derivatives, triggering the EU's binary options ban and threatening both platforms' European operations. The EU regulator also said prediction markets are rife with insider trading and questioned why the platforms block some EU countries but not others.
If the FCA eases its ban while ESMA hardens its stance, the UK becomes the platforms' primary European beachhead. That concentrates regulatory risk in a single jurisdiction. British policy momentum could reverse if ESMA's fraud framing influences UK thinking, or if the platforms' VPN workarounds anger lawmakers on both sides of the Channel.
The UK FCA review joins New Jersey's Supreme Court petition and Nevada's Ninth Circuit ruling in a transatlantic pattern where Kalshi and Polymarket face tightening regulation on both sides of the Atlantic.