Prediction markets

Last updated: 11 November 2026

Prediction markets allow people to bet on the outcomes of future events. No prediction markets are currently licensed as financial markets in Australia 

What is a prediction market 

Prediction markets are platforms that offer binary ‘event contracts’ based on the outcomes of future events.  

Event contracts pay out when a specified event occurs, with prices dynamically adjusting based on real-time probabilities. These can cover a range of categories across sporting results, popular culture, geo-political events, climate, economic and financial indicators.  

They share similar characteristics with binary options, an over-the-counter derivative product. An ASIC review found that around 75% of retail clients lost money trading binary options.  

Risks of prediction markets 

Growing interest in prediction markets overseas, including for entertainment and sports events, has driven increased trading activity and public attention. However, the reality is that you are more likely to lose money than make money. 

ASIC highlights the following risks: 

• The 'all or nothing' wager structure, where one of the outcomes is that you will lose your investment. 
• You may be betting against other traders with confidential or inside information.  
• No prediction market operators are licensed to operate in Australia, so you can’t access important rights and protections under Australian financial services law 

Prediction market contracts have all the features of a bet. They are highly speculative, typically involving an all-or-nothing outcome based on the occurrence of a particular event, a characteristic they share with binary options, which are prohibited for retail clients in Australia. In many cases, these events have nothing to do with investment. They might include, for example, whether it will rain tomorrow or whether a particular sporting team will win or by how many goals. Prediction markets may also give rise to market integrity risks, including the misuse of confidential information, market manipulation and disputes over how outcomes are determined. ASIC Chair Sarah Court 

Before you place your bets 

These tips can help you avoid the risk of losing your money on prediction markets: 

Block out the hype – Don’t feel pressured to act on investment advice you may have come across on social media, including investors or traders who are based overseas where prediction markets may be licensed. Ask yourself if you are willing to lose your money in an all-or-nothing bet. 

Base investments on accurate information – No predictions markets are currently licensed to offer financial products and services in Australia. Check the ACMA website to see if the platform is on its list of blocked gambling websites. If you receive any advice to put money on prediction markets, head to ASIC’s check before you invest page to see how you can check if a company or person is licensed or authorised to offer an investment. 

Be wary of the lack of legal protections – Be very cautious and avoid engaging with offshore prediction markets providers. Australian retail investors who use these unlicensed platforms will be unable to access important rights and legal protections, including internal dispute resolution processes and client money safeguards, which makes it difficult to recover losses or seek redress, should something go wrong. 

How to protect your money 

Prediction markets can seem appealing on the surface because of their simple yes/no event outcomes. But, before you place your bets, stop and ask yourself if you can afford to lose the lot.  

If you see an ad online or through social media offering prediction market trading, remember that none of these platforms are licenced in Australia. If you bet through an unlicensed overseas company and something goes wrong, you won't be able to get help.