Federal financial regulators in Canada are taking a firm stance on prediction markets related to sports events, contrasting sharply with the approach of U.S. regulators. The Canadian Securities Administrators (CSA) and the Canadian Investment Regulatory Organization (CIRO) issued a public notice on Thursday declaring that sports event contracts do not comply with Canada’s federal securities and derivatives laws.
According to the joint statement, "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." CIRO staff echoed this sentiment, asserting it would not be appropriate for their dealer members to facilitate or approve applications for these types of contracts.
The CSA and CIRO are not only focusing on sports and entertainment prediction markets; they are also reviewing other types of event contracts to determine whether they should be excluded from regulatory oversight.
In Canada, the environment surrounding these contracts remains relatively quiet compared to the U.S., where companies like Kalshi, Polymarket, and Crypto.com actively engage in offering such markets. The regulators expressed the need for clarification on their position due to the increasing interest in prediction markets within the country, noting their statement from August 27.
CIRO is authorized to permit its member companies to allow Canadians to access prediction markets for trading, although the offerings approved are severely restricted. Currently, only Wealthsimple and Interactive Brokers Canada have obtained approval to facilitate such trading in Canada. Wealthsimple has partnered with Kalshi to launch a platform named Wealthsimple Predict that offers around 4,000 of Kalshi’s event contracts.
CIRO's conditions are stringent:
1. Only prediction markets that resolve in 30 days or more are permitted.
2. The markets exclusively must focus on environmental forecasts, financial markets, and economic indicators; any contracts related to sports, entertainment, politics, or similar categories are prohibited.
Despite Kalshi's authorization under Canadian federal laws, its offerings in Canada remain limited and can only occur through platforms approved by CIRO. A CIRO spokesperson emphasized that "prediction-market products are not entitled to enter Canadian markets simply because they exist elsewhere."
Canadian regulators have a history of penalizing prediction market operators for non-compliance. In 2025, Polymarket settled a case with the Ontario Securities Commission, a CSA member, after admitting to violating regulations against short-term yes/no event contracts.
In Canada, oversight of gaming activities is assigned to the provinces, reminiscent of the authority given to U.S. states regarding online gambling. As of now, only Ontario and Alberta have legalized commercial sports betting and online casino gaming, while other provinces maintain that their government-run platforms are the sole legal option.
The Canadian Gaming Association (CGA) applauded the federal regulators for their clear guidance. CGA President and CEO Paul Burns stated, "Sports wagering is sports betting, whatever the platform, and it belongs within the framework that provinces have built specifically to regulate it." He emphasized the need for a distinct separation between a sports contract and a sports bet, asserting that it should not be reduced to semantic arguments.
In contrast, the U.S. regulatory landscape is marked by a different approach. The Commodity Futures Trading Commission (CFTC) has adopted a more lenient stance on sports event contracts than seen previously. The current commission is prepared to engage in legal battles against state authorities to solidify the right to offer sports betting-style products at the federal level.
The ongoing litigation regarding prediction markets in the U.S. has become a significant topic, especially after the Ninth Circuit Court of Appeals ruled against Kalshi and similar entities, establishing a division in the appeals court system that may lead to a Supreme Court examination.
