FCA Confirms Talks With Kalshi and Polymarket Over UK Entry
Financial Conduct Authority markets chief Simon Walls confirmed on October 6 that the UK regulator is in talks with prediction market operators including Kalshi and Polymarket about potential UK entry. The discussions come as the FCA weighs whether to ease the retail binary options ban that has been in force since April 2019. The platforms argue their products are not binary options or gambling, because they do not set odds, do not profit from customer losses, and match orders on a central limit order book. The UK's openness contrasts sharply with the enforcement actions taken by Czech, Belgian, French, German, Spanish, and Romanian regulators.
Simon Walls, the head of markets at the UK Financial Conduct Authority, confirmed on October 6, 2026 that the regulator is holding talks with prediction market operators, including Kalshi and Polymarket, about the conditions under which they might operate in the United Kingdom. The confirmation, reported by the Financial Times, is the clearest signal yet that the FCA is actively considering a regulated pathway for prediction markets in the UK rather than simply enforcing the existing prohibition. The talks come after the FCA spent much of 2026 reviewing whether the retail binary options ban, in force since April 2019, should continue to capture prediction market event contracts, or whether these products warrant a distinct regulatory treatment. For a UK audience, the FCA's willingness to engage is significant: it 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 only reach the platforms through VPNs.
The central regulatory obstacle is the binary options ban. The FCA prohibited the sale of binary options to retail consumers in April 2019 following widespread evidence of consumer losses and fraud in the binary options market. In its 2026 perimeter report, the FCA stated that the financial prediction-market products it examined were, in its assessment, binary options — and therefore remained subject to the prohibition. This is the crux of the definitional fight: if a prediction market event contract that pays out a fixed amount on a yes/no outcome is a binary option, it is banned for UK retail; if it is something else, a new regulatory treatment is possible. The platforms are arguing for the latter, and the FCA's decision to hold talks suggests it is at least willing to consider whether the 2019 ban, designed to stop a specific category of fraudulent product, should apply to CFTC-regulated event contracts traded on a transparent order book.
The platforms' argument against the gambling and binary-options classifications was articulated by Polymarket's chief legal officer Neal Kumar: 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 Kumar draws is between a bookmaker model and an exchange model. A bookmaker (or a fixed-odds binary options seller) sets the price, takes the opposite side of the customer's position, and profits when the customer loses — a structure with an inherent conflict of interest that underpins both gambling regulation and the binary options ban. An exchange, by contrast, matches buyers and sellers against each other, takes a transaction fee regardless of who wins, and has no position in the outcome. If the FCA accepts that prediction markets operate on the exchange model rather than the bookmaker model, the rationale for applying the binary options ban weakens considerably, because the consumer-protection concern that motivated the 2019 ban — operators profiting from engineered customer losses — does not apply in the same way.
The UK's constructive engagement stands in sharp contrast to the rest of Europe. In the same period that the FCA confirmed talks, the Czech Republic blocked both platforms, joining Belgium, France, Germany, Spain, and Romania in treating prediction markets as unlicensed gambling subject to enforcement. The divergence reflects the UK's distinct regulatory architecture: the FCA is a financial-conduct regulator with authority over investment products, and it is approaching prediction markets as a financial-markets question. Most continental European actions have come from gambling regulators applying gambling law. The UK also has a separate gambling regulator — the Gambling Commission — and sports and political prediction markets could still face gambling licensing requirements even if the FCA creates a financial-markets pathway for economic and financial contracts. The likely UK outcome, if the talks progress, is a split treatment: financial and economic event contracts regulated by the FCA as a new product category, and sports and political contracts potentially still subject to Gambling Commission licensing. That would make the UK one of the first major jurisdictions to craft a bespoke regulatory framework for prediction markets rather than forcing them into either the gambling or the banned-binary-options box.
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Recent updates
Google Adds Prediction Market Ad Policy — CFTC License Required, Ads Blocked in Five States
Google published a dedicated prediction markets section in its advertising policy on October 15, requiring domestic prediction market operators to hold a CFTC Designated Contract Market license to run ads — a requirement that favors Kalshi and Polymarket US over unlicensed rivals. Google also bars prediction market ads targeting five states where enforcement is most active: Connecticut (added recently), Michigan and New York (July), Ohio (June), and Nevada (earlier in the year). The policy makes Google's advertising platform mirror the state-by-state enforcement map, using commercial access as a de facto regulatory layer.
Kalshi Partners With Signify to Police Athlete Harassment, Codifies Anti-Abuse Rule
Kalshi announced a partnership with Signify Group on October 15 to monitor social media for abuse and threats directed at athletes, coaches, and sports personnel across the NFL, NBA, MLB, NHL, and ATP Tour. Kalshi notified the CFTC of a new rule, dated October 13, that codifies athlete harassment as an 'impermissible activity' on its platform, with sanctions up to financial penalties and permanent account closure. The move follows a September appeal by five major leagues and their players' unions for lifetime bans on abusive bettors, and positions Kalshi ahead of the integrity concerns that sports leagues and regulators have raised about prediction market sports contracts.
CFTC Moves to Classify Event Contracts as Swaps — Attempting to Settle the Core SCOTUS Question by Rule
The CFTC, led by Chairman Michael Selig, moved on October 9 to explicitly classify event contracts as swaps under the Commodity Exchange Act, which would place prediction market contracts squarely under federal swap regulation. The scope covers sports, political, cultural, and weather contracts, while a separate provision excludes casino-style gambling and sportsbook wagers. Selig said the aim is to remove 'any ambiguity' about these contracts. The action targets the exact question dividing the federal circuits and now before the Supreme Court — whether event contracts are 'swaps' — and represents an attempt by the federal regulator to settle that question by rule while the courts remain split.