Polymarket Tax in Australia: Gambling Winnings, CGT and the ACMA Block

Polymarket tax in Australia involves two separate questions. Recreational gambling winnings are generally not assessable income, and the ATO disregards capital gains and losses made directly from gambling. If Polymarket positions are bets, the betting result itself is probably outside the tax system. But the USDC you used to place the bets is a crypto asset, and swapping crypto into and out of positions can create CGT events of its own. The ATO has not ruled on how prediction markets fit these rules.

OddsFile is software, not tax advice. The ATO has not issued guidance on prediction markets or outcome tokens. This article explains the possible treatments and sources; a registered tax agent can tell you which position fits your circumstances, and a private ruling from the ATO is available for certainty.

The ACMA block and Polymarket's close-only status

In August 2025 the Australian Communications and Media Authority asked internet providers to block Polymarket under the Interactive Gambling Act 2001. It announced the block in its August 2025 list of blocked sites. Its July to September 2025 report also records a formal warning to Polymarket's operator for providing an unlicensed interactive gambling service. Polymarket's own geoblocking page lists Australia as close-only.

Two consequences follow:

1. The regulator has classified Polymarket as a wagering service. That isn't a tax ruling, but it supports reading the positions as gambling.
2. Positions opened before the block, or closed since, still need to be accounted for. Nothing here encourages getting around the block.

The possible treatments

1. Recreational gambling: not assessable

ATO guidance, including its crypto asset prizes and gambling winnings page, says that capital gains and losses made directly from gambling, or from a game or competition with prizes, are not included for CGT. That follows section 118-37 of the Income Tax Assessment Act 1997. Recreational gambling winnings are also not ordinary income. As with most windfalls, the losses are not deductible either.

2. Carrying on a business of gambling

Winnings become assessable, and losses deductible, only if you are carrying on a business of gambling. The ATO and the courts set a very high bar for this: size, system, organisation, commercial intent, and reliance on gambling as a livelihood. Very few people meet it. A full-time, systematic prediction-market trader would have to consider it, ideally through a private ruling.

3. Investment in crypto assets: CGT

There is also a view that Polymarket outcome shares are tokens you hold and trade like other crypto, rather than wagers. Under that view, selling or redeeming them is a CGT event. The ATO's guide on working out and reporting CGT on crypto treats swapping one crypto asset for another, and converting crypto to fiat, as disposals. Given the ACMA's characterisation, this view is harder to argue for Polymarket than in some other countries. It isn't impossible, especially for markets on financial or crypto prices.

The part that's taxable either way: your USDC

Even if each position is a bet, the money you bet with is a crypto asset. Look at the flow:

1. AUD → USDC on an exchange. You acquire a CGT asset.
2. USDC → outcome shares. You dispose of USDC. A gain or loss arises if the AUD value of USDC moved since you bought it.
3. Redeemed winnings → USDC. You acquire USDC at its AUD value on that day.
4. USDC → AUD. You dispose of USDC.

USDC tracks USD, not AUD. When the Australian dollar moves, each USDC disposal can create a small capital gain or loss in AUD. These amounts are usually small but not always zero, and an active trader can have thousands of them. If you held USDC for more than 12 months, the 50% CGT discount may apply to a gain.

The personal use asset exemption covers crypto acquired for less than $10,000 and kept or used mainly to buy items for personal use or consumption. The ATO says crypto held as an investment, or held for a while before use, is less likely to qualify. Whether USDC bought to fund wagers is a "personal use asset" is not settled, so don't assume the exemption applies.

Comparison table

Worked example (2025–26 income year)

Assume AUD/USD moves from 0.66 to 0.64 during the year, and a 32.5% marginal rate.

• 1 August: you buy 5,000 USDC for AUD 7,575.76 (0.66).
• You stake the whole 5,000 USDC across markets. That is a disposal of USDC worth AUD 7,575.76 at the time, so no gain.
• Your markets return 6,500 USDC. Your net betting profit is 1,500 USDC.
• 1 March: you sell 6,500 USDC for AUD 10,156.25 (0.64). You acquired the redeemed USDC over several months. In this example its average AUD value at receipt was AUD 9,920, so the capital gain on the final sale is AUD 236.25, with no discount because it was held under 12 months.

The gap grows with your results. A losing year reverses the logic. Under the gambling view, betting losses are simply lost, but small USDC capital losses can still be recorded.

Reporting and records

• The Australian income year runs 1 July to 30 June. Individual returns are generally due by 31 October, or later if you lodge through a registered tax agent.
• Capital gains go in the capital gains section of your return. Keep records of every crypto acquisition and disposal: date, AUD value, what it was for, and the counterparty or wallet.
• The ATO's data-matching programs collect information from Australian crypto exchanges. AUD on-ramps and off-ramps are visible to it even when Polymarket activity isn't.
• For real certainty, a private ruling from the ATO binds the Commissioner on your specific facts.

FAQ

Is Polymarket taxable in Australia?

The betting results themselves are probably not assessable for a recreational user. The ACMA treats Polymarket as wagering, and gambling gains are disregarded for CGT. The USDC moving in and out can still create small CGT events. A business of gambling or an investment characterisation would change this.

Are prediction market losses deductible in Australia?

Not for recreational gamblers. Losses are deductible only if you carry on a business of gambling, or (under the investment view) as capital losses against capital gains.

Do I pay tax on crypto I won from gambling?

The win itself is generally not assessable. The ATO says crypto you win and keep has a cost base equal to its market value when you received it. Selling it later is a CGT event.

Should I get a private ruling?

If the amounts are material, or you trade systematically, a private ruling gives certainty on your exact facts. A tax agent can help frame the application.

Does the US 90% gambling-loss rule apply in Australia?

No. That is a US federal rule from 2026. See the 90% limit explained if you also file in the US.

Get clean numbers first

Run the free OddsFile check: paste a Polymarket address and see your per-market results, fees and the USDC flows that create CGT events. That includes positions you never redeemed (see unredeemed losing positions). AUD reports are planned. Today's export gives your tax agent the complete trail.

Related reading: Polymarket taxes: the complete guide (US), Polymarket tax in the UK, Polymarket taxes in Canada, Hyperliquid taxes.