ASIC Says Prediction Markets Have “All the Features of a Bet”

Published: November 3, 2026 | Author: Roxy Vance

Australia’s financial regulator has said prediction market contracts have “all the features of a bet” and that it is not convinced offering them to retail clients is in the public interest. The Australian Securities and Investments Commission (ASIC) set out its position in a statement on prediction markets on October 30, 2026, and warned that Australians who use offshore platforms have no protection under Australian law.

What ASIC Said

“ASIC is not currently convinced that prediction markets for retail clients are in the public interest,” ASIC Chair Sarah Court said in the statement.

According to ASIC, the contracts are highly speculative and typically pay out on an all-or-nothing outcome, depending on whether a particular event happens. In many cases the events have nothing to do with investing: ASIC’s examples were whether it will rain tomorrow, and whether a sporting team will win or by how many goals. ASIC said these features raise questions about whether the contracts should be described as investment products at all.

The regulator also pointed to market integrity risks, including the misuse of confidential information, market manipulation and disputes over how outcomes are decided.

Why ASIC Compares Them With Binary Options

ASIC said prediction market contracts share their all-or-nothing structure with binary options, which are banned for retail clients in Australia. Both involve speculating on the binary outcome of a future event; the difference is that prediction market contracts are generally offered on a market platform, while binary options are sold over the counter through brokers.

ASIC’s ban on selling binary options to retail clients took effect on May 3, 2021, and in 2022 the regulator extended it until October 1, 2031. In the 13 months before the ban, 74–77% of active retail clients lost money trading binary options, and their accounts made combined net losses of A$14 million, according to ASIC.

Under section 798A of the Corporations Act 2001, ASIC must consider whether granting an Australian market licence would be in the public interest. The regulator said its approach is in line with several comparable jurisdictions, including parts of Europe and the UK, where regulators have restricted access to event contracts similar to binary options.

What It Means for Players

ASIC’s warning is aimed at Australians who use offshore prediction market platforms directly online. “Australians who choose to access offshore prediction markets directly online should be aware that they do not have protections under Australian law,” Court said.

ASIC also said that Australian financial services licensees that give clients access to offshore prediction markets remain bound by all their licence obligations when they do so. For anyone weighing up a prediction market, the regulator’s message is that the contracts work like bets, not investments, and that most retail clients lost money on the binary options they most resemble.

What Happens Next

Any prediction market that wants an Australian market licence would face ASIC’s public interest test, and ASIC said it is not currently convinced that retail prediction markets meet it. The regulator has tied its approach to its binary options ban, which runs until October 1, 2031.