The Financial Conduct Authority (FCA) is poised to revisit whether consumers should have greater access to investments, potentially putting the UK ban on retail binary options back under the spotlight this September and clearing a route for prediction markets to launch.
The ban was enforced in 2019, with the regulator citing concerns that retail investors could incur significant financial losses, and the risks involved might not be properly understood.
Prediction markets themselves – specifically those offering financial markets – are currently labeled by the FCA as speculative products because of the binary options they offer, which has landed them a permanent ban “given the speculating, gambling-like nature of these contracts and the high risk of consumer harm”.
However, following the regulator’s Discussion Paper on expanding consumer access to investments, the FCA has clearly stated that it will consider “whether further work on access to these products is needed”.
The paper was opened in December 2025, inviting relevant stakeholders to share their views on what the FCA can do to improve consumer confidence in investing, with speculative products being one of the categories explicitly covered.
Following the paper’s closure in March, the FCA committed to a set timeline to provide an official statement on the feedback in Q3, which we are already approaching the end of. Once the feedback is published, the FCA stated it “may consult on the issues discussed in the paper in due course”.
FCA reportedly in talks with trading stakeholders
Still, the ambiguity of “may consult” has not stopped insiders from the financial sector pushing for the abolition of the prediction markets ban, days away from the FCA’s expected statement.
The Times has reported that “multiple stakeholders” have made representations to FCA-linked officials about the prominence of prediction markets in the UK, presenting evidence of “millions of consumers using VPNs to access prediction markets overseas” – essentially exposing them to unregulated platforms.
Even if prediction markets do get a corridor through more relaxed binary options and speculative product rules, firms looking to launch such offers in the UK are still looking at a two-pronged licensing route.
Those offering predictions on the finance market will need to get a licence from the FCA, while others offering markets on politics and sports betting will have to operate under a betting intermediary licence from the UK Gambling Commission – such as the case with UK-based sports betting exchange Matchbook.
