FCA Confirms Talks With Kalshi and Polymarket Over UK Entry

Simon Walls, head of markets at the Financial Conduct Authority, confirmed on October 6, 2026 that the regulator is in talks with prediction market operators, including Kalshi and Polymarket, about the conditions under which they might operate in the UK. The confirmation, reported by the Financial Times, is the clearest signal yet that the FCA is considering a regulated pathway for prediction markets rather than simply enforcing the existing prohibition. The talks follow a year in which the FCA reviewed whether the retail binary options ban, in force since April 2019, should continue to capture prediction market event contracts. The engagement opens the possibility that Kalshi and Polymarket could become legally accessible to UK retail users for the first time, after seven years in which UK residents could reach the platforms only through VPNs.

The central obstacle is the binary options ban. The FCA prohibited the sale of binary options to retail consumers in April 2019 after widespread evidence of consumer losses and fraud. In its 2026 perimeter report, the FCA said the financial prediction-market products it examined were, in its assessment, binary options — and therefore remained banned. This is the definitional crux: if an event contract paying a fixed amount on a yes/no outcome is a binary option, it is prohibited for UK retail; if it is something else, a new treatment is possible. The platforms argue for the latter, and the FCA's willingness to hold talks suggests it will at least consider whether the 2019 ban — designed to stop a specific fraudulent product — should apply to CFTC-regulated contracts traded on a transparent order book.

Polymarket's chief legal officer Neal Kumar set out the platforms' case: prediction markets '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.' The distinction is between a bookmaker model and an exchange model. A bookmaker — or a fixed-odds binary options seller — sets the price, takes the other side of the customer's bet, and profits when the customer loses, a conflict of interest that underpins both gambling regulation and the binary options ban. An exchange matches buyers and sellers against each other, earns a transaction fee regardless of outcome, and holds no position. If the FCA accepts the exchange characterisation, the rationale for applying the binary options ban weakens, because the consumer-protection concern behind the 2019 ban — operators profiting from engineered losses — does not apply in the same way.

The UK's engagement contrasts sharply with the rest of Europe. In the same period, the Czech Republic blocked both platforms, joining Belgium, France, Germany, Spain, and Romania in treating prediction markets as unlicensed gambling. The divergence reflects the UK's regulatory architecture: the FCA is a financial-conduct regulator approaching prediction markets as a financial-markets question, whereas most continental actions have come from gambling regulators applying gambling law. The UK also has a separate Gambling Commission, and sports and political prediction markets could still require gambling licences even if the FCA opens a financial-markets pathway for economic contracts. The likely outcome, if talks progress, is a split: financial and economic event contracts regulated by the FCA as a new category, and sports and political contracts potentially still under Gambling Commission licensing. That would make the UK one of the first major jurisdictions to build a bespoke prediction-market framework rather than forcing the products into either the gambling box or the banned-binary-options box.

Operators mentioned in this article

CFTC-regulated

Kalshi

First fully CFTC-regulated US event-contract exchange.

Crypto / On-chain

Polymarket

USDC-settled on Polygon. Largest prediction market by volume.

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