Canadian financial regulators have clarified their position on prediction markets tied to sports and entertainment, stating that these event contracts should fall outside the securities and derivatives framework.
The Canadian Securities Administrators (CSA) and the Canadian Investment Regulatory Organization (CIRO) issued joint guidance on August 27 as interest in prediction markets continues to grow. Their position draws a regulatory boundary around contracts based on sporting and entertainment outcomes while leaving the status of some other forms of event contracts under review.
According to the guidance, the CSA does not consider sports- and entertainment-related event contracts suitable for regulation under securities and derivatives legislation. CIRO also said it does not consider it appropriate to facilitate or approve applications from its dealer members seeking to trade those types of contracts.
“It is important for investors and market participants to understand that event contracts based on sports- or entertainment-related activities or outcomes should not be regulated within securities and derivatives legislation,” said Stan Magidson, CSA Chair and Chair and CEO of the Alberta Securities Commission. “This notice provides important clarifications regarding the role and responsibility of Canadian securities regulators when it comes to certain types of event contracts.”
Sports Wagering Remains Under Provincial Oversight
The guidance has received support from the Canadian Gaming Association (CGA), which maintains that wagering on sports should remain within the gaming regulatory systems established by Canadian provinces.
“The Canadian Gaming Association welcomes today’s guidance from CSA and CIRO staff,” said CGA president & CEO Paul Burns. “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.”
Canadian provinces oversee gambling under the country’s existing legal framework. Ontario and Alberta have chosen models that license commercial gaming operators, while other provinces operate their markets through their respective government-owned platforms.
The CGA has maintained that the regulatory treatment of sports wagering should depend on the nature of the activity rather than the terminology companies use to describe their products.
“Online gaming and sports betting are entertainment products,” continued Burns. “The CGA recognizes that more companies may seek to enter prediction markets and that securities regulations may evolve over time.
“The Association is ready to work with CSA, CIRO, and provincial regulators as further guidance is developed, and to support efforts to ensure a consistent, high standard of consumer protection for sports wagering across Canada, regardless of how a product is structured or marketed.”
Loto-Québec also responded to the regulatory announcement, stressing that sports event contracts have gained popularity across North America while this type of betting remains illegal in Québec.
Gaming lawyer Ron Segev also supported the regulators’ position and raised concerns about treating gambling products as investments without the responsible gambling systems traditionally associated with regulated gaming.
“I think it’s good and important that they came out with this reminder to the industry and I agree with their position,” said Segev, a founding partner at Segev LLP and a member of the firm’s Securities Practice Group. “We see the public harm that can arise by conflating gambling with investing or offering gambling-style products without proper responsible gambling measures and policies in place.
“The CSA and CIRO know they are not the correct agencies to deal with these public harm issues (as relates to gambling) but are the right agencies to protect investors (as relates to hyper-short-term binary options). I think they have the right bums in the right seats on this one.”
Existing Prediction Market Access Carries Restrictions
The new guidance does not remove all event-contract trading from Canada’s financial regulatory system. Two CIRO dealer members have already received authorization to facilitate trading in a limited selection of event contracts.
Those companies are Wealthsimple and Interactive Brokers Canada. They must comply with conditions established by CIRO in consultation with the CSA, and regulators have indicated that additional restrictions or changes could apply in the future.
Wealthsimple launched its Wealthsimple Predict service after announcing a partnership with Kalshi in June. The platform offers access to approximately 4,000 Kalshi event contracts, although CIRO restrictions substantially limit the contracts available to Canadian customers compared with products accessible through prediction-market platforms in the United States.
Under the existing conditions, permitted contracts must generally take at least 30 days to resolve. Approved categories include environmental forecasts as well as certain financial market and economic indicator contracts. Sports and entertainment contracts remain prohibited, as do election-related contracts.
Qualifying contracts must also trade and clear through certain exchanges and clearinghouses regulated by the U.S. Commodity Futures Trading Commission.
Anyone trading or facilitating event contracts that qualify as securities or derivatives must continue to comply with applicable Canadian securities and derivatives legislation. Regulators are still assessing the appropriate treatment of other event-contract categories that the latest guidance does not address.
Regulators Reinforce Earlier Prediction Market Position
The August guidance follows earlier regulatory action concerning Canada’s growing prediction-market sector.
In April, the CSA and CIRO emphasized that CIRO authorization allowing firms to facilitate access to event contracts does not mean a prediction market itself has received recognition as an exchange, registration as a dealer or an exemption from relevant CSA requirements.
Canadian authorities have also previously taken action against prediction-market operators. Polymarket reached a settlement with the Ontario Securities Commission in 2025 after admitting that it breached Ontario’s Binary Options Ban, which covers the advertising, offering, sale and trading of certain short-term yes-or-no event contracts.
The settlement prohibited Polymarket from operating in Ontario for two years. The platform subsequently remained accessible elsewhere in Canada before updating its terms in July 2026 to restrict access from Alberta, British Columbia and Quebec in addition to Ontario.
The latest stance also follows a proposal from Wealthsimple calling for changes to Canada’s treatment of prediction markets. In an August 4 white paper, the company argued for removing the 30-day requirement for binary options and questioned moving traded sports event contracts into the gaming regulatory system.
“We believe it is appropriate for bilateral sports betting, where a gaming operator sets the odds and takes the other side of the bet, to be regulated under gaming laws, while sports event contracts that are traded and cleared by regulated derivatives market intermediaries to be regulated under securities laws,” wrote Wealthsimple.
The CSA and CIRO guidance takes a different approach to sports and entertainment outcomes, placing those categories outside the securities and derivatives framework. Regulators have left the assessment of other types of event contracts open as they continue examining how prediction-market products fit within Canada’s existing regulatory structure.
Source:
Prediction markets: CSA and CIRO provide guidance on certain types of event contracts, osc.ca, August 27, 2026
