The Australian Securities and Investments Commission is concerned about the increasing popularity of offshore prediction markets. The regulator described these platforms as “akin to gambling” and warned Australian consumers that they can lead to financial risks without the required regulatory protections.
ASIC has recently updated its Moneysmart consumer guidance to address the rapid growth of the widely controversial prediction markets. It urges Australian consumers always to check whether a platform is licensed before participating and to be careful with how they gamble with their funds.
The intervention comes as international prediction market operators such as Kalshi and Polymarket continue to gain momentum worldwide, while Australian financial futures company FEX Global is looking into launching what could become the country’s first regulated prediction market.
Prediction Markets Resemble Gambling
Prediction markets are platforms which allow users to buy and sell contracts tied to the outcome of future real-life events. These outcomes can be about political events, central bank decisions, commodity prices, sporting events and entertainment.
There are supporters of prediction platforms that insist that these sites help improve forecasting by accumulating expectations. However, ASIC believes that such products are fundamentally speculative.
“Whatever the legal definition of a prediction market, let's just focus on the substance and in all practical terms, it is akin to gambling,” ASIC Commissioner Alan Kirkland said in a statement.
Kirkland also reminded that no prediction market has a valid licence to operate in Australia, and that Australians who access offshore platforms do so without the consumer safeguards which are otherwise applied under Australian financial services legislation.
“If you are engaging in a prediction market, you are doing so with an operator overseas, and that means that you miss out on important protections that would apply to any other market you engage in within Australia,” he added.
In its statement, ASIC also explained that these protections include regulatory oversight, dispute resolution tools and other consumer safeguards that are not available when users play with offshore casino platforms.
Growing Popularity Raises Regulatory Concerns
The regulator also discussed how interest in prediction markets has spiked all around the globe, and that it’s fueled by aggressive marketing, influencer promotions, and sponsorships from all kinds of professional sports teams and events.
ASIC noted that Australians are increasingly being exposed to these platforms, which happens mainly through social media, YouTube creators and international advertising campaigns, including promotions displayed during major football tournaments.
It’s currently difficult to calculate just how many Australians are betting on these illegal prediction markets, but Kirkland stated that several platforms already offer contracts on Australian events, including decisions by the Reserve Bank of Australia.
Furthermore, ASIC’s updated guidance advises consumers to confirm whether a provider is licensed and to check whether gambling websites appear on the Australian Communications and Media Authority’s register of blocked operators. It also urges local users to carefully consider whether they can afford to lose the full amount they invest before participating.
Insider Trading Risks Highlighted
Beyond consumer protection concerns, ASIC also warned that prediction markets may present opportunities for insider trading.
The regulator pointed to several ongoing legal cases in the United States involving allegations that individuals used confidential information to profit from event-based contracts, while noting that enforcement becomes particularly difficult when platforms operate across multiple jurisdictions.
Kirkland talked about the possibility of insider trading which could be happening on these platforms. He also mentioned how detecting and enforcing insider trading rules against offshore operators can be a nearly impossible task.
New Rules for Gambling Advertising
While the debate about prediction markets rages on, Australia is also looking into restricting how Australian casinos can advertise. Earlier this year, the country announced long-anticipated advertising reforms, which will go into effect on January 1, 2027.
According to Prime Minister Anthony Albanese, the changes should balance adults’ freedom to gamble while also protecting children from widespread gambling promotion.
The reforms come more than 1,000 days after the Peta Murphy parliamentary inquiry recommended a phased, near-total ban on gambling advertising, but the government opted for less restrictive measures.
Public health groups welcomed the reforms. However, they argued they do not go far enough, and even called for a comprehensive ban on gambling advertising rather than partial restrictions.
Debate Over a Regulated Australian Market
Despite ASIC’s latest warning, discussions still continue over whether prediction markets could eventually be regulated in Australia.
Australian financial futures trading firm FEX Global has previously expressed interest in becoming the country’s first licensed prediction market operator. The company argues that a regulated local market would provide safer access than the growing number of offshore platforms already serving Australians.
However, Kirkland said ASIC has not yet received a formal licence application from the company.
“If somebody was to submit an application to operate a prediction market in Australia, then of course we would determine that under the law, but that's not the reality now,” he said.
For now, ASIC maintains that prediction markets remain illegal in Australia, with the regulator seeking to raise public awareness of the risks as global interest in the products continues to grow.
