ASIC Says Prediction Markets Have All the Features of a Bet

Australia's financial regulator has told platforms that a retail prediction market is unlikely to pass its public interest test for a market licence. Offshore users and the licensees who route them there have been put on notice.

• The Australian Securities and Investments Commission (ASIC) said on 30 October that it is "not currently convinced" that prediction markets for retail clients are in the public interest
• ASIC Chair Sarah Court said the contracts share their all-or-nothing structure with binary options, which ASIC has banned for retail clients until 1 October 2031
• The statement warns Australians using offshore platforms that they have no protection under Australian law, and reminds financial services licensees that their obligations still apply
• Court told a parliamentary hearing that no prediction market operator has applied for a licence, according to Finance Magnates and The Straight
• Polymarket has been blocked in Australia since August 2025 under the gambling law, reports say, as regulators elsewhere draw similar lines, including Spain's DGOJ

ASIC Puts Its Public Interest Test in Front of Prediction Markets

ASIC published the statement on prediction markets, numbered 26-261MR and attributed to Chair Sarah Court, on 30 October. "Prediction market contracts have all the features of a bet," it says, describing them as highly speculative and typically paying out on an all-or-nothing basis depending on whether an event occurs.

The statement says that structure is shared with binary options, which are prohibited for retail clients. Many contracts, Court added, have nothing to do with investment: the statement gives whether it will rain tomorrow, or whether a sporting team will win and by how many goals, as examples, and says such features "raise questions" about whether the products are properly described as investments. ASIC also cited market integrity risks, including misuse of confidential information, market manipulation and disputes over how outcomes are determined.

The statement carries two warnings. Australians using offshore prediction markets directly "do not have protections under Australian law", it says, and Australian financial services licensees that facilitate access to offshore markets remain bound by all their licence obligations in doing so.

The Binary Options Precedent and the Licence Test

Background notes to the statement point to section 798A of the Corporations Act 2001, which requires ASIC to consider whether granting an Australian market licence would be in the public interest. ASIC says its approach mirrors its treatment of binary options, which it banned for retail clients from 3 May 2021 and later extended until 1 October 2031. The extension responded to data showing up to 77% of retail clients had lost A$14 million, approximately US$9 million, in a year, the notes say. ASIC also says regulators in parts of Europe and the UK have restricted event contracts with similar features.

The statement follows ASIC's markets sector priorities letter of 30 September, which said many event contracts share "characteristics associated with wagering", and committed ASIC to monitor how they are marketed and distributed and to "consider the boundary between wagering and financial products". Court told a parliamentary hearing that no prediction market operator had applied to operate in Australia and that any application would face a "high bar", according to Finance Magnates and The Straight.

On the gambling side, the Australian Communications and Media Authority (ACMA) blocked Polymarket in August 2025, finding it offered a prohibited service under the Interactive Gambling Act 2001, Finance Magnates reports. ACMA continues to order blocks on offshore gambling sites. The Straight reports that a licensed wagering brand, Bet Right, offers an exchange-style InfoMarket product whose rules state that every trade is a wager, citing the Northern Territory's Racing and Wagering Act 2024.

Australia Is Closing the Financial Route, Not the Product

By applying the public interest test in advance, ASIC signals that a Kalshi-style exchange licensed as a financial market is unlikely to be granted for retail clients. That leaves the gambling route, where ACMA treats Polymarket as an illegal offshore service and event-style products sit inside state and territory wagering licences, with their consumer protections. The statement does not address the other way in: whether a domestic wagering licence could carry contracts on economic or political events.

The Warning to Licensees Has the Sharpest Edge

For the industry the second warning matters more. Brokers holding an Australian financial services licence that might follow Plus500, which Finance Magnates reports clears Kalshi contracts for US retail clients, now know ASIC treats offshore access as within their existing obligations. ASIC has named no licensee and has not said which obligations it has in mind, but with the binary options order still in force, retail distribution is a supervisory risk.

Australia Joins a Widening Consensus Outside the US

Australia now sits beside other markets: Spain's regulator says prediction markets offering gambling need a gambling licence, while IG Group plans UK prediction markets for professional clients only. ASIC's framing, that these are bets in financial clothing, is the argument US states make against federal oversight; in Australia, the financial regulator is making it.

ASIC has not banned prediction markets, but it has told the market where a retail licence application would stand. For platforms seeking Australian customers, the open door, if there is one, is a wagering licence.