Australia Questions Public Interest and Risks of Prediction Markets
Australia.- 5 November 2026 | www.zonadeazar.com The Australian Securities and Investments Commission (ASIC) has renewed its concerns about prediction markets, arguing that these products share characteristics with traditional betting and may expose retail customers to significant risks.
ASIC Chair Sarah Court questioned whether prediction markets serve the public interest and highlighted concerns involving speculation, market manipulation and the misuse of confidential information.
The regulator’s position represents another challenge for companies seeking to expand prediction market operations in Australia.
ASIC Compares Prediction Markets to Betting
According to Sarah Court, prediction market contracts display many characteristics associated with gambling.
These products allow users to speculate on future events, including sporting results, weather conditions and other uncertain outcomes.
Court highlighted their binary structure, under which participants receive a payout if their predicted outcome occurs or lose their stake if it does not.
ASIC believes this structure raises questions about whether such contracts should be classified as conventional investment products.
Questions Over the Public Interest
The regulator stated that it remains unconvinced that prediction markets offered to retail customers serve the public interest.
This consideration is particularly important because Australian legislation requires ASIC to assess the public interest when determining whether to grant certain financial market licences.
The authority questioned whether contracts based on sports results or weather conditions should be presented as investment products.
The statement does not introduce a new blanket ban on prediction markets but sets out the regulator’s concerns about their risks.
Market Manipulation and Insider Information
ASIC identified several potential market integrity issues:
- Insider information: participants using confidential information to gain an advantage.
- Market manipulation: attempts to influence contract prices or underlying events.
- Contract settlement: disagreements over how event outcomes are determined.
- Consumer protection: potential weaknesses in dispute resolution and safeguarding customer funds.
These issues are becoming increasingly relevant as event-contract platforms gain international attention.
The Binary Options Precedent
ASIC also drew parallels with binary options, financial products whose distribution to retail customers was prohibited in Australia in 2021.
Both products involve speculation on specific future outcomes.
The binary options ban followed regulatory findings that a high proportion of retail consumers were losing money.
According to ASIC’s earlier analysis, between 74% and 77% of active retail customers experienced losses during the period examined.
This precedent continues to influence the regulator’s cautious approach to prediction markets.
Warning for Offshore Platforms
ASIC reminded Australian consumers that accessing offshore prediction markets directly does not provide the protections available under Australian financial law.
The regulator also warned Australian financial services licensees that facilitating access to overseas platforms does not remove their existing regulatory obligations.
Companies must continue complying with Australian law, even when products are supplied by foreign operators.
Australia Previously Blocked Polymarket
Australia has already taken enforcement action involving international prediction market platforms.
In August 2026, the Australian Communications and Media Authority (ACMA) directed internet service providers to block access to Polymarket.
The measure followed findings that the platform was offering products without the authorisation required under Australian gambling legislation.
The intervention highlights the regulatory challenges facing international operators interested in entering the Australian market.
FEX Global Proposes a Regulated Market
Despite regulatory concerns, commercial interest in developing authorised prediction markets in Australia continues.
Futures trading company FEX Global has proposed a platform that could become one of the country’s first regulated prediction markets.
Any eventual approval would depend on the relevant licensing process and ASIC’s assessment.
The regulator would need to consider the financial characteristics of the products alongside their potential consequences for consumers.
Industry Impact and Next Steps
ASIC’s position adds to the international debate about the legal classification of prediction markets and their similarities to traditional betting.
Australia continues to adopt a cautious approach to these products, particularly when they target retail customers.
By highlighting speculation, manipulation and insider information risks, ASIC is questioning whether prediction markets serve the public interest and signalling a demanding regulatory environment for companies seeking to operate in Australia.
Future licensing applications will need to satisfy the public-interest assessment and comply with Australian financial regulations.
Edited by: @fonta
