The UK’s Financial Conduct Authority (FCA) is said to have reached out to forecast market firms as part of discussions on whether the regulator will ease restrictions on retail investors from 2019.
According to a Friday report by The Times, the FCA is weight Lifting restrictions on prediction market platforms such as Polymarket and Kalshi for UK-based retail investors. As prediction markets offer binary options on event contracts, such as sports, politics and weather, they fall under the ban imposed by the FCA in April 2019, where companies was “Selling, marketing or distributing binary options to retail consumers is prohibited.”
“Binary options are gambling products disguised as financial instruments,” the FCA’s executive director of strategy and competition, Christopher Woolard, said at the time of the ban.
According to the Times report, many UK-based retail investors are using virtual private networks (VPNs) to bypass the country’s restrictions on the prediction market and trade on Kalshi and Polymarket, both of which operate in the US. Bernstein Research to guess April predicted that the total market industry could reach $240 billion in trading volume in 2026 and $1 trillion in 2030.
If the FCA overturns the 2019 ban, prediction market platforms such as Kalshi and Polymarket could face similar challenges as they are facing in the US, where individual state gaming authorities are suing companies for sports event contracts. Last week, New Jersey officials petitioned the Supreme Court to hear his case against Kalshi, potentially leading to clarification between state and federal authorities over the prediction market.
Related: Kalshi issued the first lifetime ban for a Republican politician for insider betting
