ASIC prediction markets stance casts doubt on retail access

Australia has fired a clear warning shot at the industry's global expansion. In a short statement attributed to chair Sarah Court, the Australian Securities and Investments Commission said it is not currently convinced that ASIC prediction markets licensing for retail clients would be in the public interest, because the contracts have all the features of a bet.

What happened

The regulator described event contracts as highly speculative, usually paying all or nothing on whether something happens, a trait they share with binary options, which are already banned for retail clients in Australia. Many of the events have nothing to do with investing, ASIC said, citing whether it rains tomorrow or by how many goals a team wins, which raises questions about whether the products should be called investments at all.

It also flagged market-integrity risks, including misuse of confidential information, manipulation and arguments over settlement. People in Australia who use offshore prediction markets directly have no protection under Australian law, ASIC said, and local licensees that facilitate access remain bound by all their licence obligations.

Under section 798A of the Corporations Act, ASIC must consider the public interest when granting a market licence. Finance Magnates noted that the statement sets out the regulator's position rather than a formal ban, and that ASIC extended its binary options ban to 2031 after finding that 74% to 77% of retail clients lost money.

Why it matters

Australia joins parts of Europe and the UK in treating event contracts like binary bets rather than financial tools, a contrast with the U.S., where the CFTC is defending exchanges against states. It narrows the list of rich markets where Kalshi and Polymarket can grow legally, after earlier talks in Britain described in our FCA prediction markets report.

It also fits ASIC's broader approach to crypto-style products, outlined in our ASIC digital asset rules coverage: welcome innovation, but on investor-protection terms set in Sydney, not imported from offshore.

The binary options comparison is pointed. In ASIC's view both are wagers on a yes-or-no result; the difference is mainly that prediction contracts trade on a market platform while binary options were sold over the counter through brokers. Its 2021 ban was later extended to October 2031, Finance Magnates said. By framing ASIC prediction markets policy through that lens, the regulator signals it sees more consumer harm than price discovery in retail event trading.

What's next

Watch for licence applications and for how brokers offering access to U.S. venues respond. ASIC's full statement is brief and worth reading in full.

No operator has applied for an Australian market licence, Finance Magnates reported. The ASIC prediction markets position makes it unlikely one will succeed soon, and it hands U.S. state regulators another foreign precedent to cite.

For Australian users, the practical message is simple: offshore platforms offer no local recourse if something goes wrong.