The UK's Financial Conduct Authority (FCA) is considering lifting a ban on prediction markets for retail investors, which has been in place since 2019. This move comes as the regulator is reportedly reaching out to companies in the sector to discuss potential changes to the current restrictions.
Prediction markets like Polymarket and Kalshi, which offer binary options on events such as politics, sports, and weather, are currently prohibited from selling, marketing, or distributing their products to UK retail consumers. This ban was originally implemented in the FCA's April 2019 directive.
Many UK-based retail investors have been bypassing these restrictions using virtual private networks (VPNs) to access platforms like Kalshi and Polymarket, both of which operate in the US. This shift in regulatory approach may be occur as the rest of the industry grows; Bernstein Research estimated in April that the total prediction market industry could reach $240 billion in trading volume by 2026 and $1 trillion by 2030.
