ASIC chair raises concerns over prediction markets for retail clients

Australia’s top financial regulator has looked at prediction markets and is not convinced they belong in the hands of everyday investors.

The Australian Securities and Investments Commission (ASIC) doubts that retail prediction markets serve the public interest.

The position came into sharper focus on October 29, 2026. ASIC Chair Sarah Court told a parliamentary hearing that the regulator has not received a single application from a prediction market operator seeking to run services in Australia.

Treated like binary options, which is not a compliment

Any future application from a prediction market operator would be assessed in a similar way to binary options. That comparison carries real weight in Australia.

Binary options are banned for retail clients until October 1, 2031. They pay out on an all-or-nothing basis: you either collect the full payoff or lose your stake. Prediction markets share that same structure, and ASIC has noticed.

The data behind the binary options ban is not flattering. In the period before the ban, between 74-77% of active retail clients lost money. Total losses reached A$15.7 million, against just A$1.7 million in gains.

By putting prediction markets in the same mental bucket, ASIC is effectively setting the bar. An operator would need to show its product works differently for retail users, not just that it is packaged more attractively.

A warning that has been building all year

The parliamentary comments did not arrive out of nowhere. In August 2026, ASIC published consumer guidance through its Moneysmart service, warning Australians to steer clear of unlicensed prediction market platforms.

That guidance labeled these services as akin to gambling. It also stated that no prediction market operator holds an Australian financial market license.

The practical upshot is significant. Users on these platforms have no local protection if they lose their capital, and no Australian regulatory backstop if a legal dispute arises.

ASIC Commissioner Alan Kirkland has reinforced the warnings. He has pointed to the possibility of losing everything you put in.

Kirkland also flagged a structural problem. Trading on these platforms tends to favor better-informed participants, which can leave ordinary users exposed to people trading on insider information.

Offshore platforms and the VPN workaround

None of this has stopped offshore platforms from offering prediction markets to the world. Polymarket and Kalshi have listed markets on a range of events, including political outcomes.

Australian authorities have already pushed back. The Australian Communications and Media Authority (ACMA) blocked Polymarket in 2025, classifying it as illegal online gambling under the Interactive Gambling Act.

Notably, that block came even as the platform continued to offer contracts tied to Australian political events.

The block has not been airtight. Australians can still reach these offshore sites using VPNs, which mask a user’s location.

That workaround carries a real cost. Anyone trading this way does so without the protections that come with local regulation, a gap that has drawn further concern from ASIC about consumer safety.

What this means for operators and traders

For prediction market operators, the message from Canberra is fairly clear. Australia is not closed by statute to the concept, but the licensing path runs straight through a regulator that sees the product as a cousin of a banned one.

Operators could consider relocating or altering their offerings to fit local rules, given the significant penalties for operating illegally in Australia.

The hurdle for any such entrant is steep. The binary options precedent means an applicant would likely need to address the all-or-nothing payoff structure head on, rather than hoping a fresh label changes the assessment.

For traders, participation often means operating in an environment with no regulatory safeguards. Australians using offshore platforms face the possibility of total capital loss. They may also face legal implications, as ASIC’s warnings make plain.

The information asymmetry Kirkland described also deserves attention. A market that rewards the best-informed participant is, by design, less forgiving to someone betting on a hunch about an election.

The things to watch are straightforward. First, whether any operator actually lodges an application with ASIC, and how the regulator handles it against the binary options benchmark.

Second, whether ACMA extends its blocking efforts beyond Polymarket to other offshore platforms offering similar contracts. Kalshi has offered prediction markets on political outcomes, but the research findings do not indicate any comparable block on that platform.

Third, whether the binary options ban, set to run until October 1, 2031, becomes the de facto template for how Australia treats event-based contracts more broadly.