As the popularity of prediction markets that resemble sports betting continues to rise in the U.S., Canadian federal regulators have taken a firmer stance. The Canadian Securities Administrators (CSA) and the Canadian Investment Regulatory Organization (CIRO) issued a public notice on Thursday clarifying that sports event contracts do not fall under the country’s federal securities or derivatives laws that regulate financial trading.
The joint statement from the CSA and CIRO asserts that event contracts based on sports and entertainment outcomes should remain outside the bounds of these regulations. It also emphasized that CIRO does not believe it is appropriate to allow dealer members to facilitate or approve trading in these types of contracts.
In addition to reviewing sports and entertainment markets, the CSA and CIRO are exploring which other event contracts might also be excluded from regulatory approval.
Currently, the impact of these restrictions on sports event contracts has not stirred significant controversy in Canada compared to the vibrant market seen in the U.S. Companies like Kalshi, Polymarket, and Crypto.com have made a mark in states where sports betting is legal, as have large operators such as DraftKings, Fanatics, and FanDuel.
However, the CSA felt compelled to clarify their position on prediction markets on August 27 due to a growing interest in this area within Canada. The CSA allows CIRO to authorize its member firms to offer prediction markets; yet even these approved companies face strict limitations on the offerings available.
At present, only Wealthsimple and Interactive Brokers Canada have received approval to facilitate access to prediction markets trading for Canadians. Wealthsimple has partnered with Kalshi, creating the Wealthsimple Predict platform that showcases around 4,000 of Kalshi’s event contracts.
CIRO has stringent requirements concerning these products: only prediction markets with resolutions of 30 days or longer are permitted, and such markets can only address environmental forecasts, financial markers, and economic indicators; categories like sports and entertainment are off-limits.
While Kalshi can technically operate under Canadian federal rules, its offerings remain severely restricted, limited to trades facilitated through CIRO-approved member firms. A CIRO spokesperson highlighted that simply because prediction-market products exist elsewhere doesn’t mean they can enter the Canadian market.
Past enforcement actions have illustrated the regulatory environment, as the Ontario Securities Commission, part of the CSA, penalized Polymarket in 2025 for breaching regulations against short-term yes/no event contracts.
Regarding the broader landscape, Canada’s legal framework for gambling is governed by provincial law. To date, only Ontario and Alberta have legalized commercial sports betting and online casinos, while other provinces uphold that only their government-controlled platforms are legal.
In their Thursday statement, the Canadian Gaming Association (CGA) endorsed the federal regulators for establishing, what they consider, a clear boundary. CGA President and CEO Paul Burns noted that all forms of sports wagering should fit within the regulations designed by provinces specifically for this purpose, asserting that the distinction between sports contracts and sports bets should not simply be a matter of semantics.
In stark contrast, the U.S. regulatory environment shows a more lenient approach taken by the Commodity Futures Trading Commission (CFTC), which has adopted a more permissive regulatory framework around sports event contracts. The CFTC is currently engaging in litigation to uphold the rights of registrants to offer sports betting-style products at a federal level.
As 2026 progresses, the debate surrounding prediction markets in the U.S. continues, particularly after a recent ruling against Kalshi and others by the U.S. Court of Appeals for the Ninth Circuit, which resulted in a split among circuit courts—a matter likely to reach the Supreme Court.
