ASIC Raises Concerns Over Retail Prediction Markets, Comparing Them to Binary Options
Australia’s corporate regulator doubts retail prediction markets serve the public interest, noting a lack of license applications.
ASIC Raises Concerns Over Retail Prediction Markets, Comparing Them to Binary Options
Australia's corporate regulator doubts retail prediction markets serve the public interest, noting a lack of license applications.
ASIC Scrutinizes Retail Prediction Market Operations
Australia's top financial regulator has examined prediction market offerings and remains unconvinced that these products belong in the hands of everyday investors. The Australian Securities and Investments Commission (ASIC) has expressed doubts that retail prediction markets serve the public interest.
The regulatory position came into sharper focus during a parliamentary hearing on October 29, 2026. According to ASIC Chair Sarah Court, the regulator has not received a single application from a prediction market operator seeking to run services within Australia.
Parallels Drawn to Banned Binary Options
Any future application from an operator will be assessed similarly to binary options. This comparison carries significant weight in Australia, where binary options are banned for retail clients until October 1, 2031.
Binary options operate on an all-or-nothing payout structure where investors either collect the full payoff or lose their entire stake. Because prediction markets share this exact structure, ASIC has placed them in the same category and set a high bar for potential operators.
Consumer Protection and Offshore Platforms
Data from the period preceding the binary options ban indicates that between 74% and 77% of active retail clients lost money, resulting in total losses of A$15.7 million against A$1.7 million in gains. ASIC Commissioner Alan Kirkland has reinforced these warnings, pointing to the risk of losing entire investments and noting that trading on these platforms often favors better-informed participants using insider information.
Despite warnings and consumer guidance issued in August 2026 labeling these services as akin to gambling, offshore platforms like Polymarket and Kalshi continue to list markets on events such as political outcomes. Although the Australian Communications and Media Authority blocked Polymarket in 2025, users continue to access offshore sites via virtual private networks without local regulatory protections.
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