The City regulator has held talks with trading platforms about the possibility of relaxing a ban on prediction markets amid the rapid rise of UK consumers using American websites such as Kalshi and Polymarket.
The Financial Conduct Authority (FCA) has taken soundings on a possible lifting of the block on prediction platforms, which allow users to place wagers on the outcome of events including financial index movements, sports matches and political elections.
The FCA bans financial prediction markets for retail investors because they are considered binary options — a trade on whether an event will happen or not. The ban has been in place since 2019 over concerns that customers could incur heavy losses using the products and that traders may not understand the risks involved.
