Canadian securities and investment regulators do not appear keen to allow the same sort of sports-led prediction market boom that has played out in the United States.
- Canadian regulators said sports and entertainment prediction contracts should not be approved as securities or derivatives.
- Unlike the U.S., Canadian financial regulators are limiting prediction markets to certain economic, environmental, and financial contracts.
- Canadian gaming groups welcomed the stance, arguing sports prediction markets are essentially sports betting and should remain under provincial regulation.
Staff of the Canadian Securities Administrators (CSA) and the Canadian Investment Regulatory Organization (CIRO) issued a notice Thursday saying sports- and entertainment-related event contracts should not be regulated under securities and derivatives legislation.
While the regulatory staffers acknowledged that event contracts could meet the "broad definitions" of securities or derivatives, they don't believe sports-related ones should be regulated as such.
“CSA staff’s view is that Event Contracts based on sports and entertainment events or outcomes should not be regulated within securities and derivatives legislation,” the notice said. “CIRO staff do not consider it appropriate to facilitate or approve an application by their dealer members to trade these types of Event Contracts.”
The two regulatory bodies said review of other categories of event contracts is ongoing. However, their stance on sports-related prediction markets makes it clear that there won’t yet be the same official blessing of those products in Canada as there has been in the U.S.
That blessing, courtesy of the U.S. Commodity Futures Trading Commission (CFTC), has created a fast-growing business of buying and selling "yes" or "no" contracts tied to events (and chiefly ones related to sports) via federally regulated exchanges.
Stopped at the border
The trading of sports-related event contracts is happening in states that have and have not legalized sports betting, and some state gambling regulators just view it as sports betting they haven’t authorized.
The expansion of the U.S. prediction market industry into sports has triggered a ton of litigation involving state gambling regulators on one side, and the CFTC and the exchange operators it regulates on the other.
However, Canada has a different regulatory structure than the U.S., and Thursday’s notice suggests that the country’s regulators are not yet opening the floodgates.
The notice follows guidance issued earlier this year that came in the wake of some limited approvals of Canadian prediction markets. The offerings on those exchanges were limited from the outset and subject to certain terms and conditions. Thursday’s notice reiterated those limitations.
“Under these terms and conditions, the CIRO investment dealer members may only facilitate trading of a limited set of Event Contracts that are traded and cleared through certain U.S. regulated exchanges and clearing houses, namely those that are based on economic, environmental or financial indicators,” the notice said.
Canadians may still be accessing offshore prediction markets or platforms operating outside their home provinces, including by using VPNs. Nevertheless, prediction markets do not enjoy the same kind of broad regulatory cover in Canada as their counterparts in the U.S. And, among other things, Canadian securities regulators prohibit offering "binary" options that mature in 30 days or less.
Only two entities have been approved to carry a limited set of event contracts in Canada thus far: Interactive Brokers and Wealthsimple. There is also an exchange, STX, that is licensed by Ontario gambling regulators (and that is seeking CFTC registration).
Polymarket, meanwhile, recently tightened access to its international site in Canada by adding Alberta, British Columbia, and Quebec to its roster of restricted regions (Ontario was already on the list).
In the U.S., there are more than a dozen prediction market operators. Those include Kalshi and Polymarket, as well as sports-focused brands such as Novig, ProphetX, DraftKings, and Underdog.
Re: prediction markets...
— Geoff Zochodne (@GeoffZochodne) August 27, 2026
The Canadian Gaming Association (@CanadianGaming) says that the country's securities and investment regulators "have drawn a clear and sensible line: the distinction between a sports contract and a sports bet should not be reduced to semantics." pic.twitter.com/4p9JmEMPAh
Thursday’s news was welcomed by the Canadian gaming industry, which is chiefly regulated by the provinces.
“The Canadian Gaming Association welcomes today’s guidance from CSA and CIRO staff,” CGA CEO Paul Burns said in a statement. “It brings clarity to a question that matters a great deal to Canadian consumers, provincial governments, and the licensed gaming industry: sports wagering is sports betting, whatever the platform, and it belongs within the framework that provinces have built specifically to regulate it.”
Loto-Quebec also reminded Quebec residents that its platform is the province's only authorized online wagering option.
“Over the past year, the popularity of prediction markets offering sports and entertainment event contracts has grown significantly in North America,” the provincial lottery and gaming corporation said in a press release. “However, it is important to remember that this form of betting is not legal in Québec and that there are real risks regarding the integrity of the results.”
