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Australia’s corporate regulator has sounded the alarm over offshore prediction markets, warning that users risk losing money without the protections available in licensed domestic markets.
The Australian Securities and Investments Commission (ASIC) said the surge in popularity of global platforms such as Kalshi and Polymarket, valued at roughly $US22 billion and $US15 billion, has prompted it to update its Moneysmart website with new guidance.
Commissioner Alan Kirkland explained that anyone trading on these sites is dealing with operators overseas, which means “you miss out on important protections that would apply to any other market you engage in within Australia.”
He stressed that while prediction markets are often marketed as financial products, they are in practice speculative wagers. “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,” he said.
ASIC’s warning comes as FEX Global, a local futures trading house, has pitched what could become Australia’s first regulated prediction market, according to ABC.
ASIC concerned about insider trading
ASIC has raised alarms about insider trading risks linked to offshore prediction markets, pointing to ongoing cases in the United States as evidence of the problem.
Kirkland warned that these examples “are potentially just the tip of the iceberg,” adding, “We really don’t know how much insider trading might actually be happening on these platforms.”
One of the more notable cases involves a U.S. soldier accused of betting on the removal of Venezuelan leader Nicolas Maduro while being involved in a covert operation tied to that outcome. Kirkland said such activity is “very difficult to detect and difficult for overseas regulators to enforce insider trading laws where they apply.”
Australia has already made moves against prediction markets, with the Australian Communications and Media Authority ordering ISPs to block access to Polymarket last August after finding it breached the Interactive Gambling Act by offering unlicensed products.
CFDs also called out
ASIC has widened its warning to include contracts for difference, highlighting the dangers of these leveraged products.
CFDs let investors speculate on price movements without owning the asset, but the risks are steep. Margin calls can quickly force traders to add more funds or see their positions closed at a loss.
Unlike prediction markets, CFDs are permitted under Australian law when offered by licensed providers. Even so, ASIC says the odds are stacked against retail investors, with at least 68% losing money when trading them.
The regulator’s caution forms part of a broader push to tighten oversight of gambling‑like products in a country already known for some of the highest per capita gambling losses worldwide.
