As Australians engage with billion-dollar prediction markets, betting on anything from war, weather to pop culture, the corporate watchdog is forced to step in.

The corporate watchdog has issued its strongest warning yet about the risk of offshore prediction markets.

Prediction markets are illegal in Australia and consumers are not protected under financial services laws.

ASIC is updating its Moneysmart website with guidance and advice about prediction markets, including that users are likely to lose money.