FCA Prediction Markets Talks Open a UK Door for Kalshi

The two biggest names in event trading are knocking on London's door. FCA prediction markets talks with Kalshi and Polymarket were confirmed on October 6, 2026, by Simon Walls, the Financial Conduct Authority's markets chief, according to the Financial Times. The discussions concern a potential entry into the UK. But any launch would have to navigate two regulators and a ban that has kept a whole category of products away from British retail customers since 2019.

What happened

CCN reported that the FCA is holding talks with prediction-market operators as Kalshi and Polymarket explore UK entry, citing Walls's confirmation to the FT. Neither the regulator nor the companies have announced any decision, and no change to existing rules has been proposed.

The biggest obstacle is the FCA's ban on binary options. From April 2, 2019, the regulator permanently barred firms acting in or from the UK from selling, marketing or distributing binary options to retail consumers. Predictable noted the FCA introduced the measure after finding consumer harm and poor conduct by providers, and estimated it could save retail customers up to £17 million a year. The prohibition covers all binary options, including securitised ones. The FCA said such products have predetermined binary payouts, are priced in a similar way to fixed-odds betting products and are unlikely to be profitable for investors over time.

That history matters because the FCA has already looked at these products. In its 2026 perimeter report, the regulator said the financial prediction-market products it examined were binary options and remained subject to the ban, CCN reported, pointing to their speculative nature and potential for consumer harm.

Why it matters

FCA prediction markets talks would not settle the whole question, because UK oversight is split by subject. The FCA covers prediction-market products tied to financial and certain climatic events. Contracts on non-financial outcomes, such as politics and sport, fall under the Gambling Commission. A platform offering both types would need a gambling licence for its political and sports contracts and relief from the FCA's ban for its financial ones.

The Gambling Commission has already set out its view. In February it said current prediction-market products appeared likely to meet the UK definition of a betting intermediary, with core features similar to a betting exchange, according to Predictable. Betting exchanges have operated legally in the UK since 2000, and licensed firms must meet requirements on consumer protection, fairness, market integrity and crime prevention. Commercial products that meet the statutory definition of gambling must be licensed, and an unlicensed operator targeting British consumers may commit criminal offences.

The companies reject the gambling label. In an October 5 letter published by the FT, Polymarket chief legal officer Neal Kumar wrote that "prediction markets such as ours 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." He acknowledged that "credible platforms must always monitor user behavior," but argued that dismissing price discovery on real-world events as gambling misunderstands how the markets work.

The talks come as both firms face pressure elsewhere. New York authorities have sued Kalshi and Polymarket, alleging unlicensed gambling, Spain opened proceedings against both in May and ordered their websites blocked as a precaution, and France's gambling regulator ordered internet providers to block Polymarket in July, CCN said. In the Netherlands, Polymarket is challenging a ban in court, as we reported in our story on the Polymarket Dutch ban. In the United States, Kalshi continues to fight state-by-state battles, covered in our report on Kalshi's Missouri talks.

What's next

The near-term question is whether the FCA would consider changing its stance on financial event contracts, or whether the companies would enter the UK through a narrower route, such as a Gambling Commission licence for sports and politics only. Neither path has been announced. A UK licence would be a significant credibility boost for operators that are being blocked or sued in several other markets.

For now, the FCA prediction markets talks are just that: talks. British users should not expect Kalshi or Polymarket to be offered legally in the UK soon. Watch for any FCA consultation on event contracts, a Gambling Commission licence application, or comments from the companies about a UK timeline.