ASIC says prediction markets are not “in the public interest”
Australia’s financial watchdog says that it “is not currently convinced that prediction markets for retail clients are in the public interest,” echoing multiple warnings that the contracts can be manipulated and citizens aren’t protected on the sites by financial services laws.
In a Friday release, the Australian Securities and Investments Commission (ASIC) doubled down, noting that “Prediction market contracts have all the features of a bet. They are highly speculative, typically involving an all-or-nothing outcome based on the occurrence of a particular event, a characteristic they share with binary options, which are prohibited for retail clients in Australia.”
ASIC questions whether prediction market contracts “are appropriately described as investment products,” again warning that “Australians who choose to access offshore prediction markets directly online should be aware that they do not have protections under Australian law.”
The warning from the financial regulator extends to financial service licensees, noting that those “that facilitate access to offshore prediction markets should be aware that all their license obligations under Australian law continue to apply to them in this activity.”
No prediction market platform is licensed in Australia, with the Australian Media and Communications Authority (ACMA) already placing Polymarket on a list of blocked gambling websites. Rival Kalshi has not yet been listed on that site, however it has self-excluded itself from the country.
The closest that Australia has to a legal prediction market is Betfair, which is widely used for sports betting – with punters betting against other punters and the company taking a commission. Most bets made through the exchange are on horse racing, greyhounds, AFL, NRL, cricket and other sports. However, the exchange also allows for bets on elections and other events.
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The Backstory
Australia’s two-track warning on prediction markets
Australia’s scrutiny of prediction markets has moved from a narrow gambling enforcement issue to a broader question about retail financial risk. The Australian Securities and Investments Commission’s latest position that prediction markets are not currently shown to be “in the public interest” builds on months of warnings from both financial and gambling regulators that the products sit outside the protections Australians usually expect when they trade, bet or deposit money online.
The shift matters because prediction market operators have often presented event contracts as financial products rather than gambling. Users buy positions on whether a future event will occur, from elections and economic data to sports outcomes. But Australian regulators have focused less on the label and more on the structure: all-or-nothing outcomes, speculative pricing and the possibility that users may be trading against counterparties with better information. ASIC’s concern is that retail clients may not understand that offshore platforms are unlicensed in Australia and that local financial services protections do not apply.
That position followed an earlier ASIC warning that no prediction markets are licensed in Australia. The regulator used its Moneysmart consumer guidance to tell Australians that offshore event contracts can be manipulated and that users cannot rely on Australian financial services law if something goes wrong. The message was aimed not only at consumers but also at licensed financial firms that might facilitate access to offshore markets while still owing obligations under Australian law.
Polymarket became the test case
The clearest Australian test case has been Polymarket, the crypto-based prediction market that lets users wager on political, sporting and economic outcomes. The Australian Communications and Media Authority investigated the platform and concluded that its contracts were not financial products or investments under Australian law. Instead, the regulator found the activity met the definition of online gambling.
That conclusion, disclosed after a freedom of information request, led to Polymarket being placed on Australia’s blocked gambling websites list in August. The decision was detailed in a report on how the Australian regulator ruled prediction markets are gambling. ACMA found that Polymarket had drawn about 1.88 million Australian visitors from November 2024 to May 2025, a scale that undercut any notion the issue was marginal or theoretical.
The Polymarket case also illustrated why regulatory classification carries commercial consequences. If a platform is treated as gambling, it needs to comply with Australia’s gambling rules and cannot offer prohibited interactive gambling services to Australians. If it is treated as a financial product, it would face a separate licensing and conduct regime. ACMA’s decision rejected the financial-product framing for Polymarket, while ASIC has now reinforced the view that even if such contracts are described as investments, their features resemble bets and raise unresolved consumer-protection concerns.
Offshore operators have exposed enforcement gaps
Australia’s concern over prediction markets sits inside a wider enforcement problem: offshore gambling operators continue to market to Australians despite not being licensed in the country. ACMA has blocked more than 220 illegal gambling services since 2019, but operators can rebrand, use mirror domains or rely on social media promotion faster than site-blocking can respond.
The problem was visible during one of Australia’s most prominent sporting events. Offshore operators used Australian Open imagery, ticket giveaways and tennis-themed promotions to attract bettors, according to coverage of illegal gambling sites using the Australian Open in promotions. One unlicensed casino, Vegastars, offered front-row tickets and used tournament branding despite having no affiliation with the event. Other sites used player images or Australian Open-themed offers, creating the risk that consumers would assume a connection to a legitimate Australian sporting institution.
That episode helps explain why regulators are wary of prediction markets gaining traction through offshore channels. Even when a service is blocked, promotions can persist on social platforms and through influencers. For consumers, the distinction between a licensed bookmaker, an offshore casino and a prediction market dressed as a trading platform can be blurred by professional advertising, familiar sports imagery and the use of local cultural references.
Influencers became part of the regulatory perimeter
Australian regulators have also moved to put social media intermediaries on notice. ACMA warned influencers that they risk fines of up to AU$59,400 if they promote or publicize illegal online gambling services to Australians. The warning followed cases in which influencers promoted Leon Australia, an offshore operator that claimed to be a top Australian sportsbook and online casino despite operating from Belize and lacking an Australian license.
The threat of fines against Australian influencers showed how enforcement has expanded beyond operators to the marketing chain that gives offshore platforms domestic reach. Influencers had posted promotions for Leon Australia on Instagram, while a major tabloid said an advertisement for the platform had been served programmatically and then blocked.
For prediction markets, that development is significant. These platforms often grow through online communities, social media commentary and viral political or sports markets rather than conventional bookmaker advertising. If offshore platforms use influencers, affiliates or programmatic ads to reach Australians, regulators can argue that the harm is not confined to financial loss. It also includes the normalization of unlicensed wagering products that bypass age checks, complaint handling, responsible-gambling measures and local dispute mechanisms.
The policy lesson from the Philippines debate
Australia’s enforcement dilemma has parallels in other regulated markets weighing how to contain illegal online gambling without weakening licensed channels. A recent analysis of the Philippines argued that a total gambling advertising ban could push players back to offshore operators because only licensed companies would comply. The piece on how a Philippines gambling ad ban could hand market share to illegal operators used data from several countries to argue that visibility for lawful operators, under strict rules, can help channel consumers away from illegal sites.
The Australian context is different, but the underlying causality is similar. If offshore platforms can reach consumers through digital channels while licensed operators or regulated financial firms face tighter limits, enforcement must do more than publish warnings. It must also make the legal status of products clear to consumers and reduce the ability of illegal operators to exploit major events, social media and payment channels.
That is why ASIC’s current stance is not only about whether prediction markets are attractive or innovative. It is about who bears the risk when an Australian uses an offshore platform that is not licensed, may be difficult to sue, may host counterparties with inside information and may not segregate or protect customer funds to Australian standards. In that setting, the absence of a local license is not a technicality. It is the reason the consumer has little recourse.
Why the stakes extend beyond one platform
The regulatory pressure on Polymarket and the warning signs around Kalshi show that Australia is trying to draw a line before prediction markets become embedded in retail betting culture. Betfair already offers Australians a legal exchange model for sports and some other events, with the company licensed and subject to local oversight. Offshore prediction markets challenge that model by offering a broader menu of event contracts without the same Australian permissions.
ASIC’s public-interest language raises the bar for any future operator seeking legitimacy. It signals that a platform cannot rely on financial-market vocabulary if the product functions like a bet, nor can an intermediary assume that offshore access avoids Australian obligations. ACMA’s blocking powers address availability, while ASIC’s warnings address characterization, conduct and investor protection.
The combined message is that Australia sees prediction markets as part of a larger offshore gambling and consumer-risk problem. The next phase will test whether warnings, website blocking and influencer enforcement are enough, or whether regulators will need stronger tools around payments, app access and advertising technology. For now, the direction is clear: prediction markets are being treated not as harmless crowd forecasts but as speculative products that can expose Australians to losses without the protections of either a licensed gambling market or a regulated financial one.
