The Australian Securities and Investments Commission (ASIC) has raised concerns about prediction markets, arguing that their event-based contracts share key characteristics with traditional gambling products.

In a statement published on October 30, 2026, ASIC Chair Sarah Court said the regulator was not convinced that prediction markets were in the public interest for retail clients. She highlighted the speculative nature of these products and questioned whether contracts based on sporting results, political developments and other real-world events should be classified as financial investment products.

The regulator’s position adds to the growing international debate over how platforms such as Kalshi and Polymarket should be supervised.

ASIC Questions the Financial Classification of Prediction Markets

According to ASIC, prediction market contracts have many of the characteristics of bets. They typically involve an all-or-nothing financial outcome depending on whether a particular event takes place.

Court compared these products with binary options, which are prohibited for retail clients in Australia. Both involve speculation on the outcome of a defined event, although prediction market contracts are generally traded through online platforms rather than offered over the counter by brokers.

ASIC also pointed out that many available markets have little connection to conventional investment activity. Examples include contracts on whether it will rain the following day or whether a particular sports team will win a match.

The regulator believes these characteristics raise questions about whether prediction market products should be treated as financial instruments.

Concerns Over Insider Trading and Market Manipulation

ASIC’s concerns extend beyond consumer losses. The regulator also highlighted potential risks to market integrity.

These include the possibility of participants using confidential information to gain an advantage, manipulating market prices and disputing how the outcome of an event is determined.

Such risks may be particularly difficult to monitor when platforms operate offshore and are not subject to Australian regulatory oversight.

Court also warned that Australians who access foreign prediction markets directly online do not receive the protections available under Australian law.

These protections can include regulatory supervision and formal mechanisms for addressing complaints and disputes.

No Prediction Market Holds an Australian Market Licence

ASIC confirmed that no prediction market operator currently holds an Australian market licence.

This means platforms such as Kalshi and Polymarket cannot rely on an Australian financial market licence to offer their services to local retail customers.

The regulator also addressed the responsibilities of Australian financial services licensees that facilitate access to offshore prediction markets. Such companies must continue to meet their existing obligations under Australian law, even when the underlying platform operates overseas.

The distinction is important because using an offshore provider does not automatically remove the regulatory responsibilities of an Australian-licensed intermediary.

Australia Maintains a Restrictive Approach to Binary Options

ASIC’s position is consistent with its existing restrictions on binary options.

Australia prohibited the sale of binary options to retail clients in 2021. The ban was subsequently extended for another decade following evidence of substantial losses among retail investors.

The regulator has drawn parallels between binary options and prediction market contracts because both products can involve speculation on a specific future event with a binary financial outcome.

However, prediction markets are generally structured as exchange-based platforms where participants trade contracts with one another. This difference in market structure has become central to the international debate over their regulatory classification.

ASIC’s latest statement indicates that the regulator is not currently prepared to treat prediction markets as ordinary investment products simply because they operate through trading platforms.

What ASIC’s Position Means for Kalshi and Polymarket

The regulator’s stance creates additional uncertainty for international prediction market operators seeking access to Australia.

Without an appropriate Australian licence, offshore platforms do not provide local users with the protections associated with regulated financial markets. Australian intermediaries that facilitate access also remain subject to their domestic licensing obligations.

The debate is not limited to Australia. Regulators in several jurisdictions are examining whether event-based contracts should fall under gambling legislation, financial market rules or a separate regulatory framework.

For now, ASIC’s October statement signals a cautious approach to retail prediction markets. Any operator seeking approval to enter the Australian financial market would need to address the regulator’s concerns about consumer protection, market integrity and the nature of the contracts being offered.

Source: https://ua.tribuna.com/casino/1000000389984-finansovyy-rehulyator-avstraliyi-pryrivnyav-rynky-prohno/