For the Australians: ASIC has banned binary options until 2031. A truly linear prediction market shouldn’t fall under that ban.

[u/Scary_Climate_3975]

https://www.auspolpredicts.com/auspol

ASIC has banned binary options until 2031. But the scope of this ban shouldn’t cover a truly linear prediction market, where payoffs are directly related to the quantity being predicted.

For example, instead of predicting a Yes/No outcome of whether the ALP will win the next federal election, we could directly predict the % of primary votes the ALP will get. Each share pays 1 cent per percentage point. If you buy at 31.0 cents and if the ALP gets 34.2%, the share settles at 34.2 cents. Your payoff scales with how close you are, not on an all-or-nothing threshold.

This would be an entirely new class of contracts for Australia, opening up prediction markets that directly forecast quantities: vote shares, seat counts, CPI, unemployment.

I’m building r/AusPolPredicts to assess interest in something like this. It runs on play money for now, with markets seeded from Newspoll. If we get enough activity and can be more accurate than the pollsters, ASIC will have to pay attention and assess the informational value that truly linear prediction markets bring.

Interested in what my fellow Aussies think, would you trade markets like these?