Canadian securities regulators have reinforced their position that prediction-market contracts linked to sports and entertainment should not be offered through the country’s securities and derivatives framework, setting Canada apart from the rapidly expanding US market.
The Canadian Securities Administrators (CSA) and the Canadian Investment Regulatory Organization (CIRO) issued joint guidance on August 27 confirming that regulated investment dealers should not facilitate trading in event contracts based on sporting or entertainment outcomes.
The clarification comes as prediction markets attract increasing attention from financial platforms and consumers in Canada. Although event contracts can fall within broad legal definitions of securities or derivatives, regulators said the subject matter of sports and entertainment contracts makes them unsuitable for approval through the securities regime.
CIRO also indicated that it would not support applications from its dealer members seeking permission to offer such products.
Regulators Limit Permitted Event Contracts
Under the current Canadian approach, regulated prediction-market products are primarily restricted to contracts tied to economic, environmental and financial indicators. Other categories remain under review, with CSA and CIRO expected to provide additional guidance when necessary.
Political and election contracts are already excluded. Earlier regulatory guidance also established that products based on activities prohibited under Canadian federal, provincial or territorial law cannot be offered through regulated investment dealers.
Another major restriction comes from Canada’s rules governing binary options. Most provinces and territories prohibit retail distribution of binary contracts with terms shorter than 30 days, a measure introduced in 2017 amid concerns about fraudulent offshore trading platforms and investor losses.
British Columbia does not participate in the national instrument but maintains its own regulatory regime that similarly prevents short-term binary-option trading.
Those restrictions make it difficult to reproduce many of the prediction contracts that have gained traction in the United States, where markets can cover individual games, awards, entertainment events and other outcomes that resolve within days or even hours.
Canada currently has a much narrower regulated prediction-market sector. Gambling Insider reported that Interactive Brokers’ IBKR Forecast Trader and Wealthsimple Predict provide regulated access to eligible event contracts, while other financial-market businesses have shown interest in entering the segment.
Wealthsimple Pushes for Broader Rules
The regulatory decision comes weeks after Wealthsimple called for substantial changes to Canada’s prediction-market framework.
In an August 4 policy paper, the company argued that event contracts should continue to be treated as derivatives and supervised through securities regulation regardless of their underlying topic. Wealthsimple also proposed modernising the country’s binary-option restrictions and allowing a broader selection of contracts, including products connected to sports, entertainment and elections.
Wealthsimple said more than one million Canadians have already accessed prediction markets, with many using offshore platforms that operate without Canadian regulatory oversight. The company pointed to the rapid expansion of major international operators, saying combined monthly trading volume across Kalshi and Polymarket increased from below US$5 billion in September 2025 to around US$24 billion by April 2026.
Its position is that regulated exchanges and dealers already have mechanisms addressing risks such as manipulation, insider trading, custody of customer funds and counterparty failures.
Canadian regulators have now rejected that argument at least for sports and entertainment contracts, maintaining a separation between financial event trading and products that closely resemble conventional wagering.
The Canadian Gaming Association has supported that distinction, arguing that sports wagering should remain within the regulatory systems established by provincial gaming authorities rather than being introduced through investment-market rules.
The latest guidance therefore gives regulated financial firms a clearer boundary as Canada’s prediction-market industry develops: financial, economic and environmental contracts can remain within the emerging securities framework, while sports and entertainment outcomes remain outside it for now.