NEW YORK - U.S.-Canada relations aren’t exactly at an all-time high right now, but U.S.-based prediction market operators have yet to strain those ties further by trying to launch their brand of online sports wagering via event contracts north of the border.
For example, Kalshi is the leader among prediction market operators in the U.S. regulated market right now, and its member agreement prohibits trading from Canada.
“We’ve dodged a bullet,” Canadian Gaming Association president and CEO Paul Burns said during a Canada-focused panel this week at NEXT.io’s New York Summit.
- Canadian regulators have largely kept U.S.-style prediction market sports betting out of the country, partly due to securities rules banning short-term binary options.
- Ontario penalized Polymarket and reinforced restrictions, with regulators suggesting prediction markets involving sports would likely not be allowed.
- Despite restrictions, experts say demand in Canada could still mean that prediction markets try to meet it via "grey" or "black" market channels.
That bullet hasn’t been dodged in the U.S., where federally regulated prediction markets have disrupted the status quo of the traditionally state-regulated business of online sports betting.
There are now legal battles raging across the U.S. over the legality of the sports-related event contracts offered for trade by prediction markets, with no indication that the situation will calm down anytime soon.
As a result, there was nearly non-stop chatter about prediction markets at this week's NEXT conference in Manhattan.
However, in 2017, Burns noted, Canadian provincial securities regulators announced a ban on offering “binary options” that resolves in less than a month.
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
The “yes/no” betting markets offered by prediction market operators very much fall into that category. Polymarket learned this last year, when its operators were hit with a two-year trading ban and more than $200,000 in financial penalties by Ontario securities regulators.
The sanctions were for a failure to comply with the ban on offering “short-term binary options” to Ontario investors between June 2020 and May 2023.
“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,” a press release explained.
A “yes/no” proposition is exactly what prediction markets offer users, and Ontario regulators said, “Enough.”
Sports-related contracts were also among the products Polymarket had offered Ontario-based investors. The settlement agreement noted that “many of the Contracts offered through Polymarket fell under categories that attract speculation, such as politics, sports, crypto, coronavirus, and pop culture.”
Let's put a pin in this
The Polymarket settlement in Ontario “put a pretty good pin” in prediction markets in Canada for the time being, Burns said this week. He also said the Alcohol and Gaming Commission of Ontario (AGCO), the regulator of Ontario sports betting and iGaming, now has a memorandum of understanding with the Ontario Securities Commission.
“I can probably say if prediction markets come back in any form to Canada - I know there are people trying to do that, talking to the regulators about it - it won't include sports,” Burns said. “And we will probably make sure of that too.”
Outside of Ontario, which has welcomed a small army of provincially regulated iGaming operators since 2022, Canada still has a robust “grey” or “black” market for online gambling. That makes it pretty easy for Canadians across the country to find an online sportsbook or casino that is not regulated by the provinces to scratch whatever betting itch they may have. They may not need a prediction market at all.
Nevertheless, and as Burns’ comments suggest, there is interest in bringing prediction markets to Canada. Furthermore, there is demand for what prediction markets are offering, and there are traders based in Canada.
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Bullet dodged or deferred?
While Ontario has been included among Polymarket’s “restricted jurisdictions” since May 2023, there’s no mention of Canada or other provinces in the site’s terms of use. In other words, Canadians outside of Ontario could still use Polymarket’s global site.
FanDuel continues to expand its novelty betting markets (at least here in Ontario) to the point you can now wager on when patio beers are happening again: pic.twitter.com/lS6mTacO1P
— Geoff Zochodne (@GeoffZochodne) February 26, 2025
Ron Segev, founding partner of gambling-focused law firm Segev LLP, said that if the “new norm” for betting isn’t necessarily on sports and there is unmet demand in Canada, “that demand will find a supply.”
“There's almost no question,” Segev said. “So I'd really like to see the provincial operators (and) regulators put their heads around that.”
Katie Lever, general counsel and chief administrative officer for land-based casino operator Great Canadian Entertainment, said she would bet on Canadian authorities deeming prediction markets as a form of betting and therefore subject to the country’s Criminal Code, which lays out what’s permissible for gambling.
At that point, prediction markets would need to be offered by a provincially regulated gambling operator or would need to find a way to “shift” their business under the umbrella of securities regulators, which may be unlikely, to endorse their products.
“That being said, is it likely going to be Canada's next black market? Probably,” Lever said during the NEXT panel.
Watching and waiting
U.S.-based Interactive Brokers did launch prediction markets in Canada last year, but it required conversations with securities regulators to get it done. Moreover, there are no sports or election betting opportunities offered on the platform.
Ontario does have one provincially licensed betting exchange, STX. However, the concept hasn’t taken off in an iGaming market where there are more than 30 provincially regulated online sportsbooks. Some operators, such as FanDuel, also offer a variety of "novelty" betting markets that are prediction market-like, in addition to wagering on elections.
(Ontario is still the only province in Canada that has authorized multiple private-sector iGaming operators to take bets. Alberta, though, is working toward launching a similar market for online gambling.)
Even so, Joseph Hillier, president and CEO of iGaming Ontario, the government agency with which online gambling operators sign contracts that authorize business in the province, said prediction markets are “something we're aware of, and we're monitoring.”
“At the end of the day, it's going to ultimately be a government policy decision in terms of where it lies in the Ontario marketplace,” Hillier said in an interview with Covers at NEXT.
It’s currently treated as an investment-like product, and so Hillier said he’d defer to the Ontario Securities Commission on legality.
“But it's something that we're open to having conversations with our regulatory partners, whether that's the Alcohol and Gaming Commission, Ontario Securities Commission, and other stakeholders in the sector, as it becomes a growing issue and a bigger discussion for Canada,” Hillier said.
