Australia’s corporate regulator has raised doubts about whether retail prediction markets serve the public interest, arguing that their all-or-nothing payouts and focus on events such as sport and weather make them resemble wagers more than investments. The position signals that any application for an Australian market licence would face scrutiny under a public-interest test.
ASIC chair Sarah Court said in a statement posted on Friday that prediction markets share features with binary options, which are banned for retail clients in Australia. She also warned that users of offshore platforms do not receive direct protection under Australian law. Australian licence holders that facilitate access to those platforms remain responsible for meeting their regulatory obligations.
Licensing and consumer risks
ASIC’s consumer guidance says no prediction market operator is licensed as a financial market in Australia. It identifies several risks, including the possibility that markets could be influenced by confidential information and disagreements about how an event is resolved.
The guidance also points to a lack of dispute-resolution procedures and client-money safeguards on unlicensed offshore platforms. ASIC’s position is tied to section 798A of the Corporations Act, which requires the regulator to consider the public interest when deciding whether to grant a market licence in Australia.
Polymarket lists Australia among the countries it blocks. Kalshi also identifies Australia as a “restricted jurisdiction” in a January update.
ASIC’s statement does not amount to a formal ruling covering every product that resembles a prediction market. It does, however, set out the regulator’s current concerns and the basis on which future market-licence applications would be assessed.
Binary options and international oversight
The warning comes against the backdrop of ASIC’s action on binary options. A ban on issuing and distributing the products to retail customers began on 3 May 2021 and was later extended to 1 October 2031.
ASIC said that during the 13 months before the original ban, between 74% and 77% of active retail clients lost money. Their combined losses were $14 million.
The statement also comes as regulatory approaches to prediction markets evolve across Europe. This summer, authorities in nine countries announced a joint initiative targeting unlicensed platforms. Regulators from Belgium, France, Germany, Italy, the Netherlands, Poland, Portugal, Spain and Switzerland pledged to strengthen cross-border cooperation and oversight of the expanding sector.
