The U.K.’s Financial Conduct Authority (FCA) has reportedly held discussions with trading platforms about potentially easing restrictions on financial prediction markets for retail investors, according to The Times.
The talks come as growing numbers of British consumers turn to overseas platforms such as Kalshi and Polymarket to trade contracts tied to future events.
Prediction markets allow users to take positions on binary outcomes, including developments involving the economy, sports and weather. The FCA currently classifies contracts tied to financial events and certain weather outcomes as binary options.
Retail sales of binary options have been prohibited in the U.K. since 2019.
The regulator is now examining whether the restriction should be adjusted as access to international prediction platforms expands.
Despite the reported discussions, the FCA’s official stance remains unchanged. In its latest perimeter report, the regulator said the ban continues to be justified because these contracts are speculative and can expose consumers to financial harm.
The FCA nevertheless indicated that it could conduct additional work to clarify the regulatory treatment of prediction products and how consumers should be allowed to access them.
Industry representatives have been pressing officials to reconsider the policy. The Times reported that participants have provided the FCA with evidence suggesting that millions of Britons are already using offshore prediction platforms.
Some users reportedly rely on virtual private networks to get around geographic restrictions. Such workarounds can leave consumers without the protections available through U.K.-regulated services.
The latest review follows an FCA discussion paper on retail investment rules. The document raised the possibility that certain prediction products could fall within the existing binary-options prohibition.
It also questioned whether speculative investments should be regulated primarily according to the risks they pose rather than the category or label assigned to the product.
Prediction Markets Gain Momentum
The regulatory debate comes as prediction markets experience rapid growth.
Bernstein estimates that global trading volume in prediction markets could reach $240 billion this year, up sharply from $51 billion in 2025, according to figures cited by The Times.
The leading platforms have also attracted major valuations. Kalshi is reportedly valued at $22 billion, while Polymarket has reached approximately $21 billion.
The market has begun attracting established financial and betting companies as well. Coinbase, Robinhood and DraftKings have each launched prediction-market products.
However, offering a broad selection of prediction contracts to British customers would require navigating more than one regulatory framework.
Financial event contracts would need to be permitted by the FCA. Sports and political prediction markets would face a separate regime because those products fall under the Gambling Commission and would require a gambling license, according to The Times.
The FCA had not immediately responded to CoinDesk’s request for comment.
