Are Polymarket and Kalshi Legal in Australia? ASIC Warns Users Could Lose All Their Money

Australians thinking about placing money on election results, Reserve Bank interest-rate decisions, sporting events or other real-world outcomes through overseas prediction markets are being warned that they could lose their entire investment without the legal protections available in Australia’s regulated financial system.

The Australian Securities and Investments Commission (ASIC) has renewed its warning over offshore prediction market platforms such as Polymarket and Kalshi. Neither platform currently holds an Australian market licence, meaning Australians using these services do so outside Australia’s regulatory framework.

What ASIC is warning Australians about

Prediction markets allow people to buy contracts based on whether a future event will happen. Markets cover topics ranging from elections and interest-rate decisions to inflation, cryptocurrencies, weather, sporting events and international politics.

Although many platforms describe themselves as information markets or financial products, ASIC says Australians should understand that users are effectively risking money on uncertain future outcomes.

ASIC warns consumers about several major risks, including:

• losing their entire investment;
• trading against participants with superior or confidential information;
• limited legal protections if something goes wrong; and
• difficulty recovering money from overseas operators.

Contract prices are not guaranteed forecasts

A prediction contract priced at 60 cents is commonly interpreted as implying roughly a 60% chance of an event occurring.

However, that figure simply reflects the current market price based on trading activity. It is not an official forecast and can change quickly because of low liquidity, large trades, speculation or changing market sentiment.

Market prices should not be viewed as guarantees that an event will occur.

What happens if you have problems withdrawing money?

One of ASIC’s biggest concerns is what happens after Australians deposit funds on an offshore platform.

A customer may later be asked to provide identity documents, proof of residence or evidence of where they accessed the service. If the platform determines its terms were breached, withdrawals may be delayed, restricted or rejected.

Because these companies operate outside Australia’s licensing regime, users generally cannot rely on Australia’s financial dispute resolution system or consumer protections.

Recovering funds from overseas businesses may involve complex legal processes that are costly and time-consuming.

Crypto adds another layer of risk

Some prediction markets—including Polymarket—primarily operate using cryptocurrency.

That introduces additional risks such as:

• incorrect wallet transfers;
• crypto price volatility;
• cybersecurity incidents;
• wallet security failures;
• blockchain transaction mistakes; and
• online investment scams.

Many cryptocurrency transfers cannot be reversed once completed.

Why informed traders can have an advantage

Prediction markets often attract sophisticated traders, researchers, hedge funds and individuals who closely follow political, financial or industry developments.

Everyday users may unknowingly trade against participants with faster access to information or specialist knowledge.

Regulators continue monitoring concerns around insider trading, manipulation and market fairness as prediction markets grow in popularity.

Using a VPN does not create legal protection

Some Australians may attempt to access restricted platforms through a virtual private network (VPN).

Changing your internet location does not make an offshore platform licensed in Australia, nor does it provide Australian consumer protections.

Using a VPN may also breach a platform’s own terms of service, potentially creating issues during identity verification or withdrawal requests.

Why regulators are paying closer attention

Prediction markets have grown rapidly over the past two years, attracting billions of dollars in trading volume and increasing mainstream attention.

At the same time, regulators around the world are examining consumer protection, market integrity and whether some prediction contracts should be regulated differently.

Reported trading volume reflects the total value of contracts traded rather than company revenue or customer profits.

Australia still has no licensed prediction market

Although companies have expressed interest in launching Australia’s first regulated prediction market, no operator currently holds an Australian market licence for these products.

Any future proposal would need to satisfy Australia’s financial services laws before operating legally.

How to protect yourself before investing

Before sending money to any prediction market platform, Australians should verify whether the provider is authorised to operate locally.

Consumers should:

• search ASIC’s professional registers;
• check the Australian Communications and Media Authority’s blocked gambling website register where appropriate;
• be cautious of influencer promotions and social media advertising;
• understand they could lose their full investment; and
• keep records of transactions, wallet addresses and communications.

If you experience a frozen account, failed withdrawal or suspect fraudulent activity, report the matter promptly to your payment provider, Scamwatch and ASIC.

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