UK FCA Weighs Easing 2019 Ban Blocking Kalshi and Polymarket From Bitcoin (BTC) Market

FCA Revisits 2019 Retail Ban

Retail access to financial prediction markets in the United Kingdom may be about to change: the Financial Conduct Authority (FCA) is weighing a review of the rules that currently keep platforms such as Kalshi and Polymarket out of the hands of British consumers, with the reassessment centered on a prohibition that has been in force since 2019. Prediction markets let participants trade contracts tied to the outcomes of future events across economics, sports, politics and weather, and Polymarket in particular operates as an on-chain decentralized application rather than a traditional bookmaker. The FCA's position to date is unambiguous: in its March 2026 “Perimeter issues update,” the regulator stated that every financially focused prediction-market product it has so far confirmed falls within the definition of a binary option — a category whose sale, distribution and marketing to retail consumers has been permanently banned in the UK since 2019 on grounds of speculative excess and consumer harm. What has shifted is enforcement reality. UK users are increasingly reaching Kalshi and Polymarket through VPNs, placing themselves outside British consumer-protection protections entirely, and industry representatives have presented the FCA with data indicating that overseas-platform usage among Britons has already reached the scale of millions. The FCA declined to comment on the review and pointed back to its March update. A further complication is the UK's split jurisdiction: contracts tied to financial events and certain climate outcomes sit inside the FCA's perimeter, while sports and political contracts fall to the Gambling Commission. Any operator offering a full suite of markets would potentially need to satisfy both regulators — which is why betting exchange Matchbook currently runs prediction-market services under a Gambling Commission license. The commercial stakes are considerable: Kalshi reached a $22 billion valuation in a May funding round, Polymarket has been valued above $20 billion, and Robinhood, Coinbase and DraftKings have all moved into the sector.

Dual Regulators, Gibraltar First

The review lands amid an unusually dense sequence of regulatory positioning. The FCA's own discussion paper DP25/3 flags that prediction contracts may fit the prohibited binary-option definition — the very language any softening would have to amend. Across the Channel, ESMA stated in July that event contracts qualifying as financial instruments were already covered by national binary-option bans in force since 2018. The UK Gambling Commission had earlier said, in February 2026, that commercial prediction markets meet the legal definition of gambling and therefore require a betting-intermediary license of the kind held by Betfair Exchange and Matchbook. Gibraltar moved first among British territories: its Prediction Markets Ordinance took effect on July 13, 2026, carving the sector out of the territory's 2025 Gambling Act and requiring each event contract to be individually approved and certified by its gambling authority — a framework Attorney General Nigel Feetham KC described as the world's first dedicated regime of its kind, stressing that it focuses on substance rather than labels. The United States presents the contrast case: Kalshi offers event contracts domestically as a designated contract market under CFTC oversight, and an appellate ruling last month has now escalated the question of whether federal law preempts state gambling statutes all the way to the Supreme Court. For crypto-adjacent observers, the governance question mirrors debates around spot trading venues and settlement: on-chain prediction markets depend on oracle infrastructure of the kind provided by Chainlink to resolve outcomes, while order routing on decentralized venues such as Uniswap has already shown how programmable markets can run without a traditional intermediary. Notably, the FCA lifted its retail ban on crypto exchange-traded notes in October 2025 — evidence that its consumer-protection posture is not static. Readers tracking the market in real time can follow live spot and futures prices on Binance.

Bernstein's $1 Trillion 2030 Scenario

COINOTAG's read is that the FCA is regulating toward a market that is outgrowing its rules rather than waiting for one to arrive. Research firm Bernstein projects global prediction-market annual volume expanding from roughly $51 billion in 2025 to about $240 billion in 2026, with a possible path to $1 trillion by 2030. The primary document we keep returning to is the FCA's March 2026 Perimeter issues update itself: it confirms financial prediction products as binary options, which means any retail opening requires a deliberate rule change, not interpretive drift — making the DP25/3 feedback window the timeline to watch.