Australia’s corporate regulator has questioned whether prediction markets aimed at retail users serve the public interest, saying the contracts have “all the features of a bet” and resemble products already barred for ordinary investors.
The comments from the Australian Securities and Investments Commission, or ASIC, do not amount to a formal ban. But they set out a skeptical view of retail prediction markets and indicate that any operator seeking approval in Australia would face significant scrutiny.
ASIC compares event contracts to banned binary options
In a statement issued Friday, ASIC said it is not currently persuaded that retail prediction markets are in the public interest. The regulator described these contracts as highly speculative, with all-or-nothing payoffs tied to whether a specific event happens.
ASIC said those features mirror binary options, which have been banned for retail clients in Australia since 2021. That prohibition was later extended through October 2031 after data showed that as many as 77% of retail clients lost money on the products.
The regulator also argued that many of the underlying events in prediction markets do not relate to investment at all, pointing to examples such as tomorrow’s weather or the result and margin of a sporting event. In ASIC’s view, that raises doubts about whether such contracts should be presented as investment products in the first place.
No local applications have been filed
The latest statement followed remarks by ASIC Chair Sarah Court at a Senate estimates hearing a day earlier. Court told senators that no prediction market operator has applied to run such a business in Australia.
ASIC said that under section 798A of the Corporations Act 2001, it must weigh whether granting an Australian market license would be in the public interest. Court indicated that if an application were made, it would be assessed against a high bar.
ASIC’s consumer-facing Moneysmart website already states that no prediction market is licensed as a financial market in Australia. It also warns consumers that they are more likely to lose money than make money when using such platforms.
Regulator cites integrity and consumer risks
Beyond questions over product design, ASIC highlighted several risks it associates with prediction markets. These include potential misuse of confidential information, market manipulation, and disputes over how the result of an event is determined.
ASIC also addressed Australians using offshore services, warning that they do not have protections under Australian law when dealing with those platforms. The regulator added that Australian financial services licensees that help users access offshore prediction markets must still meet all of their licensing obligations.
One major platform is already inaccessible in the country. In August 2025, the Australian Communications and Media Authority blocked Polymarket as an illegal gambling site under the Interactive Gambling Act 2001.
Broader regulatory context
ASIC said its position is in line with approaches taken in other comparable jurisdictions. It referred to parts of Europe and the U.K., where regulators have also restricted access to event contracts that resemble binary options.
The regulator contrasted that environment with the United States, where the treatment of prediction markets has been more permissive overall despite state-level regulatory conflicts. For now, the confirmed position in Australia is that no operator is licensed, no application is before ASIC, and any future proposal for a retail prediction market would be judged under a public-interest test.
Source: news.bitcoin.com