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Australia has quietly drawn a hard regulatory line that could reshape the global future of so-called “prediction markets”, ruling that platforms like Polymarket are not innovative financial tools but unlicensed gambling operations.
The decision emerged from a lengthy investigation by the Australian Communications and Media Authority (ACMA), sparked by local media scrutiny and confirmed through documents released under freedom of information laws. At its core was a deceptively simple question: when users stake money on the outcome of elections, sporting matches or global crises, are they investing — or are they gambling?
Australia’s answer was unambiguous.
A challenge to the “financial product” narrative
Polymarket, a US-based crypto platform, has long argued that it operates as a form of financial derivatives market, where users buy and sell positions based on future events. This framing has proven highly effective in the United States, allowing platforms such as Kalshi to function under lighter regulatory regimes than traditional bookmakers.
But Australian regulators were unconvinced. After examining how the platform worked in practice, ACMA concluded that users were not engaging with financial products under Australian corporate law. There was no meaningful risk management, no investment structure, and no non-cash payment mechanism that would justify treatment as a financial instrument. Instead, users were simply staking money on binary outcomes — yes or no — with the expectation of profit.
In regulatory terms, that distinction matters. Because Polymarket maintained it was offering a financial service, it never applied for a gambling licence in Australia. ACMA’s ruling effectively placed the platform in breach of the Interactive Gambling Act.
Australians weren’t supposed to be there — but they were
One of the investigation’s most striking findings was how easily Australians could access the platform. ACMA staff were able to register, fund accounts and place bets while indicating they were located in Australia. There were no IP blocks, no meaningful location checks, and no safeguards preventing local users from participating.
Traffic data cited in the investigation showed nearly 1.9 million visits from Australia in a six-month period beginning in November 2024. That volume alone was enough to establish the legal “Australian-customer link” required for enforcement action.
The regulator also found Polymarket was offering in-play betting on live sporting events — a form of wagering that is prohibited even for licensed Australian bookmakers. For an unlicensed offshore platform, that represented a particularly serious breach.
Silence from the company, swift action from the regulator
ACMA provided Polymarket’s operator, Adventure One QSS Inc., with preliminary findings in May and invited a response. None came. By the end of June, the investigation was finalised, and in August the platform was added to Australia’s growing blacklist of blocked gambling websites, which now numbers close to 1,300.
Only after the blocking order did Polymarket take steps to restrict Australian users, a move regulators interpreted as tacit acknowledgement of the ruling’s force.
A global clash of regulatory philosophies
Australia’s stance places it increasingly at odds with the United States, where prediction markets have moved rapidly into the mainstream. Polymarket’s rise has been turbocharged by high-profile partnerships and political connections, including backing from figures such as Donald Trump Jr. Major media outlets like CNN have even referenced prediction market odds in political coverage, lending the sector an air of legitimacy.
This permissive environment has helped prediction markets tap into a slice of the lucrative US sports betting economy, which generated around US$14 billion in revenue in 2024. Monthly trading volumes on these platforms now run into the billions.
Yet critics argue that the financial-market label obscures risks that look strikingly similar to gambling harm. Some analysts suggest users may lose money faster on prediction markets than on conventional betting apps — a claim fiercely disputed by the platforms themselves, underscoring how contested this emerging sector remains.
Marketing, loopholes and enforcement limits
The investigation also sits against a backdrop of aggressive marketing. Earlier reporting revealed Polymarket had explored paying Australian social media creators to promote election-related betting markets, despite the platform being illegal under local law. Those promotions covered federal election outcomes, party vote shares and individual seat contests, blurring the line between political engagement and wagering.
While Australian internet service providers are now required to block access to Polymarket, enforcement has practical limits. Users can still reach the site via VPNs and other technical workarounds — a reminder that national regulation struggles to contain borderless digital platforms.
A precedent with wide implications
By formally classifying prediction markets as gambling, Australia has set a precedent that could ripple far beyond its borders. The decision challenges the central legal argument underpinning the industry’s rapid expansion and signals that regulators may be less willing to accept innovation rhetoric at face value.
For now, Polymarket’s Australian chapter appears closed. But the broader question it raised — whether betting dressed up as finance should be treated differently under the law — is only just beginning to be tested worldwide.
