As prediction markets continue seeking broader global acceptance, regulatory resistance is intensifying in key territories, with the Australian Securities and Investments Commission (ASIC) becoming the latest authority to draw explicit parallels between prediction products and gambling.
In a published blog post, ASIC Chair Sarah Court made the regulator’s position unambiguous, stating that the commission “is not currently convinced that prediction markets for retail clients are in the public interest”. Court asserted that event contracts offered by prediction market operators “have all the features of a bet” and frequently “have nothing to do with investment,” pointing to sporting outcomes as prime examples of this dynamic.
These distinctive product characteristics raise fundamental questions regarding whether prediction market contracts can be appropriately classified as legitimate investment vehicles.
A fractured global regulatory landscape
The stance taken by ASIC underscores the defining international dilemma surrounding prediction markets, specifically, whether they constitute a form of gambling or financial trading. Jurisdictions worldwide remain sharply divided on the issue. In the United States, the federal Commodity Futures Trading Commission (CFTC) has backed major operators such as Kalshi, Polymarket, Crypto.com, and Robinhood. However, state-level opposition remains fierce, with authorities in Arizona and Utah having filed criminal charges against Kalshi, which boasts a valuation exceeding $40 billion (£29.8 billion).
Elsewhere, smaller jurisdictions such as Gibraltar, Tobique in Canada, and Nevis in the Caribbean have begun establishing clear regulatory distinctions between prediction markets and traditional gambling. Conversely, major European markets maintain a frosty reception, with gambling regulators in France, the Netherlands, and Portugal voicing strong opposition.
Despite this pushback, industry players continue pursuing expansion; Polymarket, chasing a $21 billion valuation, has reportedly engaged with the UK’s Financial Conduct Authority (FCA) and the European Securities and Markets Authority (ESMA) to foster greater regulatory alignment.
Australia remains a no-go zone
For the foreseeable future, Australia will remain off-limits for major prediction market operators. Because platforms like Kalshi and Polymarket have no desire to be governed by strict gambling regulators, they must satisfy securities commissions like ASIC—a hurdle that currently appears insurmountable.
Furthermore, Court highlighted severe market integrity risks associated with prediction platforms, including the potential misuse of confidential information, market manipulation, and disputes over how event outcomes are officially determined. ASIC issued a direct warning to local consumers, noting that Australians who choose to access offshore prediction markets online do not enjoy protections under domestic Australian law. Additionally, Australian financial service licensees facilitating access to such platforms were reminded that all statutory licensing obligations continue to apply to their operations.
