The UK’s Financial Conduct Authority (FCA) is exploring regulatory easing. The watchdog has reportedly contacted several prediction market firms for preliminary talks to consider lifting a retail investor ban that has been in effect since April 2019.
The 2019 ban focused on rules prohibiting firms from selling, marketing, or distributing binary options to retail consumers. Prediction markets were caught under this scope and had to comply because their offerings take the form of binary contracts.
In practice, users have simply bypassed this domestic ban.
VPNs Become a Shortcut for Investors
Many retail investors in the UK have turned to VPNs to circumvent the existing domestic ban. Through this route, they access platforms like Kalshi and Polymarket, which operate fully in the United States.
High interest from retail users aligns with trading volume forecasts from Bernstein Research. Their report projects total prediction market industry volume could reach $240 billion by 2026 and surpass $1 trillion by 2030.
Polymarket is currently eyeing a major share of the industry’s growth. The company was previously confirmed to be targeting a valuation of up to $21 billion.
State Gaming Authorities File Lawsuits
Lifting the ban by the FCA could open legal access for Polymarket and Kalshi to the UK retail market. However, they may face challenges similar to those in the US, where state-level gaming authorities have begun filing lawsuits over sports contract offerings.
Last week, New Jersey state authorities took a step further by filing a petition with the US Supreme Court, asking the highest court to hear their case against Kalshi.
This legal move could clarify the boundary between state regulatory authority and federal power in the US. The court’s ruling will further define the operational leeway for prediction markets under the shadow of gambling regulations. Reported via Cointelegraph.
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
