Canada is having a moment of concern about prediction markets, and local regulators are reading the riot act to overly keen firms and investors.
- Canadian regulators are increasingly warning about prediction markets, emphasizing strict rules, enforcement risks, and existing bans on short-term binary options.
- Interest is growing among Canadian firms and users, influenced by the booming and controversial expansion of prediction markets in the United States.
- While Canada currently allows only limited, tightly controlled activity, rising attention, media coverage, and enforcement actions suggest a broader regulatory crackdown may be coming.
On Thursday, the Canadian Securities Administrators (CSA), an umbrella group for provincial securities regulators, and the Canadian Investment Regulatory Organization (CIRO), an industry self-regulator, issued a press release reminding everyone of the restrictions on prediction markets and event contracts in Canada.
“Anyone trading, or facilitating trading, in event contracts which are securities or derivatives, must follow applicable requirements under securities or derivatives legislation, such as registration or recognition requirements,” the release states. “For instance, in some CSA jurisdictions, Multilateral Instrument 91-102 Prohibition of Binary Options prohibits any person from advertising, offering, selling or otherwise trading a binary option having a term to maturity of less than 30 days, with or to an individual.”
The regulators noted failure to comply with local rules “may lead to enforcement action.”
Canadian regulators issued a press release today reminding everyone of the country's prediction market-related restrictions.
— Geoff Zochodne (@GeoffZochodne) April 2, 2026
"...to date, no prediction market has been recognized as an exchange or registered as a dealer (or exempted from those requirements) by the CSA." pic.twitter.com/jgJCsQZk2n
Thursday’s reminder comes on the heels of a CIRO bulletin last week, which aimed to clarify prediction market-related rules for members.
The bulletin followed news of Wealthsimple receiving regulatory approval for a limited set of event contracts after similar authorization was granted to the Canadian arm of Interactive Brokers a year earlier. Questrade, another investing platform, is reportedly seeking similar permission.
However, the rules for these firms will be strict. In short: Keep it tied to economics, financial markets, and the environment. Also, no sports betting, no election wagering, and 30-day maturity terms at least.
Although the CIRO hasn't said so explicitly, it doesn't sound like it wants to see any Monday Night Football same-game parlays offered on its watch.
“The CSA and CIRO continue to review these terms and conditions, which may be subject to change for these dealer members and/or any others in the future,” Thursday’s press release said. “While these CIRO members may facilitate Canadian client access to event contracts, traded on non-Canadian markets, to date, no prediction market has been recognized as an exchange or registered as a dealer (or exempted from those requirements) by the CSA.”
All of the above comes amid a boom for prediction markets in the U.S. For more than a year, federally regulated exchanges have facilitated growing amounts of wagering on sports, politics, and other event outcomes.
This has caused a fair bit of controversy and created a growing amount of concern among lawmakers and regulators at the state and federal levels. Lawsuits are flying, insider trading worries abound, and legislation is being introduced to rein in the action.
Northern exposure
Canada hasn't seen the same prediction market boom, but Canadians have no doubt noticed what's happened south of the border. And now, with Canadian investment firms trying to get in on the action, any preexisting anxieties may be growing.
A CBC report this week detailed wagering on Alberta separatism via prediction markets, which has caused concern about both the betting and the effect it may have on any referendum.
To top it all off, The Globe and Mail reported Thursday that Polymarket-branded flyers were handed out to people outside of a recent Toronto Blue Jays home game. The Blue Jays play in Ontario, where securities regulators issued Polymarket-related sanctions last year, including an advertising ban.
So, if a prediction market freakout in Canada isn’t happening yet, it’s getting closer. And there are reasons for and against that freakout being warranted. As the prediction market crowd likes to say, it’s time to monitor the situation.
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In Canada, provincial securities regulators have taken a stand on so-called “binary options,” a category that can include the "yes/no"-style of wagering offered by prediction markets. In 2017, those watchdogs moved to ban the offer, sale, and trading of these products if they take less than a month to resolve.
This ban had consequences for Polymarket in Ontario last year, as its current and former operators agreed to settle with provincial securities regulators over breaches.
“The Binary Options Ban prohibits the advertising, offering, selling or trading of options to individual investors in Ontario that contain a yes/no proposition regarding the future outcome of a price or event, have a term to maturity of less than 30 days and offer a fixed payout if the proposition is met or nothing if it is not,” the OSC explained in a press release.
And, according to the settlement agreement, contracts tied to sports and politics were among those offered.
Polymarket admitted they broke Ontario securities law and agreed to a settlement that included fines, a two-year trading ban, and prohibitions on advertising themselves to Ontarians.
Ontario has been one of the restricted regions for Polymarket's global site since 2023, although other Canadian provinces are not.
As has been the case since May 2023, Residents of Ontario are not permitted to trade on Polymarket. Polymarket entered into a settlement agreement with the Ontario Securities Commission on April 14, 2025.
— Polymarket (@Polymarket) April 21, 2025
Canadian securities regulators and investment industry watchdogs are well aware of what’s happening now, too. Thursday’s press release is proof.
Meanwhile, in response to the Blue Jays news, an Ontario Securities Commission spokesperson told the Globe this week that it takes “very seriously” the information it is provided.
So, to whatever extent prediction market updates are happening in Canada, watchdogs say they are monitoring everything closely.
Canadian regulators are seeing growing interest in prediction markets, and they are very cautiously approving a limited set of event contracts for trading:https://t.co/o8tabKFtTm @Covers
— Geoff Zochodne (@GeoffZochodne) March 28, 2026
Still, it’s worth noting there are some significant differences between what’s played out in the U.S. compared to Canada.
The American boom has the blessing of the current federal government. In Canada, there is no universal regulator, and authorized activity thus far is a trickle compared to what’s happened down south.
In the U.S., there has been a rush to offer prediction markets. There are investing platforms, such as Robinhood, but also pure-play prediction operators such as Kalshi and Polymarket, and well-known “gambling” brands such as DraftKings, Fanatics, FanDuel, Underdog, and PrizePicks getting involved.
As the above might suggest, the bulk of transaction volume for U.S.-regulated prediction markets involves sports, approximately 75% of trading. In Canada, the authorized version of prediction markets is limited to regulated investing platforms, and no sports are allowed.
Further restrictions may be on the way as well.
“The CSA and CIRO continue to monitor developments involving prediction markets and event contracts and intend to issue further guidance on how securities or derivatives legislation applies to them,” Thursday’s release states. “Due to regulators’ ongoing concerns around prediction markets, the CSA and CIRO will also consider whether other regulatory action is required, including changes to the terms and conditions in the above-mentioned CIRO bulletin.”
