Canadian Financial Regulators Rule Out Oversight of Sports and Entertainment‑Based Prediction Markets

Canadian regulators have drawn a firm boundary around the fast‑growing world of events‑based prediction markets, making clear that sports and entertainment contracts won’t fall under securities law. 

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In a joint notice released Thursday, the Canadian Securities Administrators (CSA) and the Canadian Investment Regulatory Organization (CIRO) said these wagers don’t fit the kind of instruments overseen by investment regulators and won’t be offered through platforms they supervise.

Alberta Gaming, Liquor and Cannabis backed the stance and said it is reviewing what the guidance means for its own oversight of online gambling in the province according to The Globe and Mail.

Much-needed clarity after months of debates, operators remain unconvinced

After months of back‑and‑forth in legal and financial circles, regulators have finally settled the question of where sports and entertainment prediction markets belong. 

By saying they won’t regulate those wagers, the securities side has effectively closed the door on sports and entertainment markets entering Canada’s investment system, even though those categories are driving most of the growth in the United States. 

Wealthsimple, which teamed up with Kalshi, and Interactive Brokers remain the only two firms in Canada with CIRO approval for event contracts. 

Wealthsimple has previously spoken against the idea that sports contracts belong under gambling rules while financial and economic contracts stay under securities law. The firm argued in a white paper released earlier this month that this split does not work in practice.

Its legal team wrote that “a contract on the outcome of a soccer match and a contract on the level of inflation are, mechanically, the same instrument,” and said regulators should treat them as part of the same product set rather than forcing them into separate regimes. 

Operators want more contracts allowed

The company also said it wants a wider range of prediction contracts to be allowed, not just those tied to a narrow list of topics. It suggested that any market whose outcome can be verified using a reliable source, such as government data or an accredited news outlet, should be eligible. 

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That view is reflected in how Wealthsimple runs its stand‑alone prediction app, Wealthsimple Predict.

Users can only trade contracts that fit within the current Canadian framework, but they can still see other markets that are not approved for trading, including bets on which film will win Best Picture at the Oscars or who will win the 2028 U.S. presidential election. 

On its website, Wealthsimple explains this approach by telling users: “We make them visible so you can follow along, even if these markets fall outside the categories currently approved for trading in Canada.” The firm has added that “We have no current plans to remove view-only contracts from the Wealthsimple Predict app.” 

Regulators to access more contract types as critics highlight insider trading and consumer protection fears

Canadian regulators have made it clear that their latest guidance doesn’t answer every question about how prediction‑market contracts should be treated. Politics, for example, remains unresolved.

The notice simply said that “assessment is ongoing,” leaving a wide category of event contracts without a final resolution. 

That uncertainty has kept the debate alive, especially among lawmakers who believe these markets should be treated as gambling to protect users. Liberal MP Karina Gould, who chairs the House finance committee, has already said she thinks prediction markets belong under Canada’s gambling rules rather than securities law so that consumers are protected. 

Critics also point to the US, where there have been multiple cases of insider trading with people allegedly using privileged information to make huge profits. Notably, a US soldier was charged with using classified intelligence to make more than US$400,000 on a bet tied to a military operation to capture Nicolás Maduro.

Canada has already seen certain financial institutions introduce policies that prohibit employees from betting on certain types of events.

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