The Canadian Securities Administrators and the Canadian Investment Regulatory Organization have drawn a firm boundary around prediction markets. Both regulators made it clear that sports and entertainment contracts won't fall under securities law, effectively handing oversight back to provincial gambling authorities.
The fast-growing world of event-based prediction markets has finally received a clear regulatory boundary in Canada. In a joint notice released in late August, the Canadian Securities Administrators (CSA) and the Canadian Investment Regulatory Organization (CIRO) announced that prediction market contracts based on sports and entertainment events should not be regulated under securities and derivatives legislation.
This ruling essentially means that if operators want to offer betting on the outcome of a hockey game or an awards show, they won't get a pass from investment regulators. Instead, the regulators are signalling that somebody else should have to police it. Different stakeholders have weighed in on the matter and it appears that the concensus is that the safety of Canadian citizens is paramount.
The newly issued Staff Notice 91-307 clarifies the CSA's view that sports and entertainment event contracts sit strictly outside their oversight. Following suit, CIRO emphasized that it does not consider it appropriate to facilitate or approve applications by its dealer members to trade these specific types of contracts.
Currently, Wealthsimple and Interactive Brokers are the only two Canadian platforms approved to offer prediction market trading. However, their offerings are strictly limited to economic, financial, or climate-related outcomes. The new guidance firmly closes the door on any hopes that these platforms might soon expand into sports or pop culture under their current investment dealer status.
The clarification from financial regulators didn't take long to ripple through the provincial gambling landscape. The British Columbia regulator quickly backed the stance, reminding residents that contracts based on sports and entertainment outcomes qualify simply as gambling under provincial law.
According to the regulator, these products fall directly under the Criminal Code of Canada and provincial gaming legislation. In British Columbia, the government gives the British Columbia Lottery Corporation (BCLC) the sole authority to conduct and manage commercial gambling, including online sports betting through PlayNow.com.
As prediction markets like Polymarket and Kalshi continue to expand their global footprint, the B.C. regulator was quick to advise residents that other online platforms accepting players from the province to trade sports or entertainment event contracts are operating illegally.
While the August notice draws a hard line on sports and entertainment, it doesn't settle the regulatory status of every prediction market product. The CSA and CIRO noted that they are continuing to assess event contracts that fall outside the categories covered by this latest guidance.
For now, the limited framework that allows certain event contracts through authorized CIRO dealer members remains in place. However, the regulators warned that the conditions for these authorized firms could face further restrictions or changes in the future as the review process continues.
The move shows that while Canada's financial watchdogs are open to exploring innovative trading markets, they are not willing to blur the lines between investing and outright gambling. This is generally a step in the right direction, especially because player protection is one of the guiding principles behind the decision.
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