Key Takeaways
- The FCA is discussing potential UK entry with prediction-market operators, Financial News reports.
- Britain’s retail binary options ban has been in force since April 2019.
- Sports and political prediction markets face separate gambling licensing requirements.
Kalshi and Polymarket are exploring UK entry as the Financial Conduct Authority holds talks with prediction-market operators.
FCA markets chief Simon Walls confirmed the discussions on Oct. 6, according to the Financial Times.
However, Britain’s seven-year ban on selling binary options to retail customers remains in place.
What Britain Actually Banned
The FCA’s prohibition took effect on April 2, 2019, preventing firms acting in or from the UK from selling, marketing, or distributing binary options to retail consumers.
These products typically offer a predetermined payout if a specified condition is met, with the investor losing their stake if the condition is not met.
When introducing the restriction, the regulator cited substantial consumer losses and provider misconduct.
It was estimated that the measure could save retail customers up to £17 million annually.
That history matters because the FCA has already assessed how financial prediction markets fit within its rules.
In its 2026 perimeter report, the watchdog said the financial prediction-market products it examined were binary options and remained subject to the prohibition.
It pointed to their speculative nature and the potential for consumer harm.
Sports and Election Markets Face Another Gatekeeper
A platform, therefore, cannot easily launch an all-in-one prediction market in the UK because it would need a gambling license for its political contracts and a lifted ban from the FCA for its financial contracts.
The FCA regulates prediction markets involving financial or certain climatic events.
Contracts based on non-financial outcomes, including sports and politics, fall under the Gambling Commission.
The Gambling Commission set out its position in February, explaining that prediction-market businesses could require a betting intermediary license.
A platform that allows participants to trade positions on event outcomes can resemble a betting exchange, even when its interface uses financial-market terminology.
Polymarket and Kalshi Talks Come Amid Backlash
The FCA talks give Kalshi and Polymarket a chance to discuss a UK launch as both platforms face legal challenges elsewhere.
In New York, authorities have sued both companies, alleging they operate unlicensed gambling businesses.
The state argues that its prediction markets fall under gambling laws and challenges the industry’s position that event contracts are subject to federal financial regulation.
European regulators have also taken similar action.
Spain opened proceedings against both platforms in May and ordered their websites blocked as a precautionary measure over suspected licensing violations.
France’s gambling regulator also ordered internet providers to block Polymarket in July, saying the website promoted illegal gambling.
Polymarket, Kalshi Push Back Against Gambling Label
Polymarket is also publicly defending its business model.
In an Oct. 5 letter published by the Financial Times, chief legal officer Neal Kumar argued that prediction markets help turn information held by different participants into useful prices.
“Prediction markets such as ours do not set any odds, we do not benefit from customer losses, traders can exit at any time, and orders are matched on a central limit order book by price and time priority,” Kumar wrote.
He added that users trade against one another, while Polymarket matches orders rather than setting odds or profiting from customer losses.
“… to ignore the information utility of prediction markets as this piece does is to miss the point entirely,” the executive added.
Kumar also argued that the platforms help users assess the likelihood of events by drawing on other traders’ knowledge.
“People use prediction markets to gain leverage from the wisdom of crowds to price in the probability of events they care about.”
He acknowledged that this requires oversight, saying “credible platforms must always monitor user behavior.”
However, he rejected the suggestion that their financial role could be reduced to gambling.
“… dismissing price discovery on real-world events as gambling misunderstands how these markets function and the participation, transparency and technological innovation that they can offer to financial markets.”
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Kurt Robson is a London-based reporter at CCN, specialising in the fast-moving worlds of crypto and emerging technology. He began his career covering local news in Cornwall after graduating from Falmouth University with First Class Honours in Journalism. There, he cut his teeth on everything from council meetings to missing swans.
He quickly rose through the ranks to become a frontline journalist at several of the UK’s leading national newspapers. Over the years, he has interviewed musicians and celebrities, reported from courtrooms and crime scenes, and secured multiple front-page exclusives.
Following the upheaval of the COVID-19 pandemic, Kurt shifted his focus to technology journalism—just ahead of the AI boom. With a natural curiosity and a trained eye for emerging trends, he has found a new rhythm in reporting on innovation.
At CCN, Kurt's work focuses on the cutting edge of crypto, blockchain, AI, and the evolving digital world. Drawing on his background in people-first reporting and his deep interest in disruptive tech, Kurt delivers stories that are insightful, entertaining, and human-centric.
