UK regulator weighs lifting prediction market ban

TLDR

The UK Financial Conduct Authority is considering relaxing its 2019 ban on retail prediction markets, which could reopen regulated access to event-based betting and crypto-linked markets in the country.

1. The FCAs ban currently blocks binary options on events like sports and politics, but it is reviewing these speculative investment rules after heavy industry lobbying.
2. Lifting or softening the ban could let UK users access regulated prediction platforms, including crypto and onchain markets, without relying on VPN workarounds.
3. Any change is likely to be tied to the UKs new digital asset regime, so the timeline and final rule details will matter for platforms and users.

Deep Dive

1. FCA Ban And Review

In 2019, the FCA banned certain event-based binary options and prediction-style products for retail investors, covering contracts tied to outcomes such as sports, politics, or weather.

An industry report says the FCA is now considering lifting or modifying that ban after evidence that millions of UK users already trade on foreign prediction platforms via VPNs, exposing them to unregulated firms and weaker protections. The regulator is reviewing its broader speculative investment rules as part of this process.

At this stage, there is no formal proposal, but the FCA has acknowledged the review and is weighing whether a supervised, licensed framework could be safer than a strict prohibition.

2. Impact On Crypto Prediction Markets

Prediction markets have grown into a major crypto-adjacent vertical, with platforms like Kalshi and onchain Solana-based markets processing tens of billions of contracts and generating hundreds of millions of dollars in fees.

If the FCA lifts or narrows the ban, UK-facing platforms could offer event contracts tied to macro data, elections, sports, and even crypto prices, using stablecoins or other digital assets for settlement under UK oversight. That would reduce the incentive for UK users to move funds offshore or into lightly regulated DeFi protocols just to access event markets.

3. What To Watch Next

The UKs new digital asset regime is scheduled to phase in from late 2026 to 2027, giving firms a window to apply for authorization before full compliance becomes mandatory. Any prediction-market liberalization will likely be aligned with that framework.

Key next steps to watch are:

1. An FCA consultation paper that explicitly addresses prediction markets or event contracts.
2. How the regulator draws the line between gambling, financial hedging, and speculative trading.
3. Whether stablecoin-based or onchain markets are included, which would be significant for crypto-native platforms.

Confidence: moderate, because the review is confirmed but the outcome and timetable are still open.

Conclusion

If the FCA decides that regulated prediction markets are safer than an outright ban, the UK could shift from a restrictive stance to a pioneering hub for supervised event contracts, including crypto-linked markets. For crypto users and platforms, the real opportunity is not just access, but clarity on how these products fit into the UKs emerging digital asset and gambling rules, which will shape how much capital and innovation can move onshore.