Key Takeaways
- ASIC said it is “not currently convinced” retail prediction markets are in the public interest.
- ASIC likened event contracts to binary options, which were banned for retail clients in 2021 and since extended to 2031.
- Polymarket has been blocked in Australia as an illegal gambling service since August 2025.
ASIC Puts Prediction Markets in the Binary Options Bucket
The Australian Securities and Investments Commission (ASIC) said on Friday that it is not currently convinced that prediction markets for retail clients are in the public interest, in a statement attributed to Court.
“Prediction market contracts have all the features of a bet,” the regulator said, describing them as highly speculative and typically involving an all-or-nothing outcome based on whether a particular event occurs.
ASIC said that trait is shared with binary options, which are prohibited for retail clients in Australia. The regulator banned their sale to retail clients in 2021 and later extended the ban to October 2031, after data showed that up to 77% of retail clients lost money. Many of the events behind prediction markets also “have nothing to do with investment,” ASIC said, citing examples such as whether it will rain tomorrow, or whether a sports team will win or by how many goals. These features, it said, “raise questions about whether prediction market contracts are appropriately described as investment products.”
The regulator also flagged market integrity risks, including the misuse of confidential information, market manipulation, and disputes over how outcomes are determined. It noted that under section 798A of the Corporations Act 2001, ASIC must consider whether granting an Australian market license would be in the public interest.
No operator has asked yet. Court told a Senate estimates hearing on Thursday that no prediction market operator had applied to run its business in Australia and that any application would face a high bar, Bloomberg reported. ASIC’s Moneysmart consumer site already says no prediction market is licensed as a financial market in Australia, and warns that users are “more likely to lose money than make money.”
ASIC warned Australians who use offshore prediction markets that they have no protections under Australian law, and told financial services licensees that facilitate access to those platforms that all their license obligations still apply. Polymarket is already off-limits locally: the Australian Communications and Media Authority blocked the platform in August 2025 as an illegal gambling site under the Interactive Gambling Act 2001.
Even with the state-level regulatory conflicts in the U.S., the approach in America is significantly more permissive than in most other major markets. ASIC referenced several comparable jurisdictions in justifying its approach, including parts of Europe and the U.K., where regulators have restricted access to event contracts that resemble binary options.
In July, the European Securities and Markets Authority said many event contracts already fall under existing retail bans on binary options across the EU, while Gibraltar went the other way the same month, creating a dedicated regulatory regime for prediction markets. The split comes as the sector’s leaders keep growing, with Kalshi saying on Thursday that it had raised $1 billion at a $40 billion valuation.
