ASIC Warns Australians to Avoid Unlicensed Offshore Prediction Markets
Australia's financial regulator said no prediction market operator holds a license in the country. ASIC warned that users face all-or-nothing losses, insider trading risks and limited avenues for recovering their money.
The Australian Securities and Investments Commission (ASIC) has published new guidance on its Moneysmart consumer website, warning that no prediction market operator is licensed as a financial market to operate in Australia.
The regulator urged Australians to steer clear of offshore providers. ASIC said consumers are more likely to lose than make money and cannot access important protections available under Australian financial services law.
ASIC Commissioner Alan Kirkland also described prediction markets as effectively a form of gambling, regardless of how regulators ultimately classify them.
“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,” Kirkland told the Australian Broadcasting Corporation.
Australian Users Face Consumer Protection Risks With Offshore Platforms
ASIC’s biggest concern centers on consumer protection. Kirkland warned that these platforms do not provide users with the safeguards that regulated platforms do.
Users may have limited or no access to formal dispute resolution, may not access Australian client-money safeguards, and may struggle to recover losses or seek redress when something goes wrong.
The regulator also highlighted the “all or nothing” structure of prediction markets. ASIC warns that one possible outcome is that users lose their entire investment. The Commission said event contracts share characteristics with binary options, an over-the-counter derivative product. A previous ASIC review found that around 75% of retail clients lost money trading binary options.
ASIC also warned that users may trade against participants who have access to confidential or insider information.
The warning comes amid several recent cases involving alleged insider trading or manipulation on prediction markets. Most recently, the U.S. Commodity Futures Trading Commission (CFTC) fined former U.S. Congressman George Santos US$35,000 for trading on a market tied to his own attendance at President Trump’s State of the Union in February.
Kirkland suggested that the known insider trading cases may represent only a small portion of such activities.
They’re potentially just the tip of the iceberg,” he said. “We really don’t know how much insider trading might actually be happening on these platforms.”
Polymarket Is on the Country’s Blocked Gambling Sites List
Australian authorities have targeted the sector before. ASIC’s warning follows action by the Australian Communications and Media Authority (ACMA), which told the country’s internet service providers to block access to Polymarket in August 2025.
ACMA found that the platform breached the Interactive Gambling Act 2001 by offering unlicensed gambling products to Australian consumers. The enforcement action followed reports that Polymarket paid Australian social media influencers on Instagram and TikTok to promote election betting markets.
Polymarket later geoblocked Australian users after authorities added it to the country’s blacklist of restricted offshore gambling sites.
Its major rival, Kalshi, does not currently appear on ACMA’s blocked-site register, although the platform has listed contracts tied to Australian sports, elections and economic events. Kalshi lists Australia as a restricted country in its User Agreement.
ASIC Also Issues a Warning Against CFDs
ASIC also cautioned consumers about contracts for difference (CFDs). CFDs are leveraged products that allow investors to bet on whether an asset’s price will rise or fall without owning the asset.
Australian law permits CFDs, but the products carry steep risks. Margin calls can force investors to inject more money at short notice or watch providers close their positions at a loss. Unlike prediction markets, CFDs may be offered legally in Australia by providers holding an Australian Financial Services license. ASIC said at least 68% of retail investors lose money trading them.
ASIC’s warnings form part of a broader tightening of gambling oversight in Australia. Australians suffer some of the highest per capita gambling losses in the world.
Prediction markets sit ambigously between the financial and gambling sectors, forcing regulators to test how far Australia’s rules can stretch to cover products that constantly reinvent themselves.
For now, the regulator says no prediction market holds a license in Australia. As a result, every offshore operator offering these products sits outside the country’s domestic consumer protection framework.
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