Canada’s securities and investment regulators have determined that bets placed on sports and entertainment through prediction markets will not be regulated under securities laws and will not be available on regulated investment platforms. The Canadian Securities Administrators (CSA), representing provincial and territorial securities regulators, along with the Canadian Investment Regulatory Organization (CIRO), issued a joint statement on August 27, 2026, outlining their stance on event contracts that allow users to wager on real-world outcomes.

According to the CSA, wagers tied to sports and entertainment events do not fall within the scope of securities and derivatives legislation. Similarly, CIRO, which oversees investment dealers and trading activities in Canadian debt and equity markets, stated it would not approve dealer applications to trade these types of contracts. Currently, CIRO-authorized dealers are limited to offering contracts related to economic indicators, financial markets, and climate trends, excluding sports and entertainment.

The decision draws a clear boundary on the expansion of prediction markets within Canada’s investment industry, effectively barring regulated dealers from offering sports and entertainment contracts. This differs notably from the United States, where sports-related contracts have fueled significant growth. Between July 2024 and May 2026, sports wagers represented roughly 80 percent of trading volume on platforms like Kalshi, according to Pew Research Center data.

Two firms, Wealthsimple Inc. and Interactive Brokers Group Inc., have received CIRO approval to provide Canadians with access to event contracts within permitted categories. Wealthsimple, which partnered with Kalshi, has argued that regulating some contracts under gaming laws while classifying others under securities regulation is unworkable. In a white paper released earlier this month, Wealthsimple’s legal leaders noted that contracts on events such as soccer match outcomes and inflation levels are structurally similar and suggested that regulators permit contracts based on verifiable sources like government data or accredited news outlets.

Wealthsimple’s standalone prediction-market application, Wealthsimple Predict, currently allows trading only on approved contracts, but users can view additional prohibited contracts such as those predicting the Oscars’ Best Picture winner or the outcome of the 2028 U.S. presidential election. The company has no plans to remove these “view-only” contracts, citing transparency for interested users.

While the regulators’ guidance clarifies the treatment of sports and entertainment contracts, it leaves open questions regarding contracts tied to other subjects, including political events. The CSA indicated that assessments of other event contracts are ongoing.

The debate over the appropriate regulatory framework is reflected in political opinions as well. Liberal Member of Parliament Karina Gould, chair of the House of Commons finance committee, has expressed support for applying gambling regulations to prediction markets to safeguard consumers. In the U.S., lawmakers are also considering whether prediction markets should be classified as gambling products. Proposed legislation, such as the Prediction Markets Are Gambling Act, would restrict contracts linked to sporting events.

Concerns about insider trading and misuse of non-public information have surfaced in the U.S. For example, a software engineer reportedly earned over US$1.2 million betting on search trends, and a U.S. soldier allegedly gained more than US$400,000 by wagering on outcomes of classified military operations. Canadian financial institutions have already implemented internal rules limiting employee participation in certain prediction market bets.

The regulatory developments come amid broader shifts in Canada’s gambling landscape. Since the 2021 passage of the Safe and Regulated Sports Betting Act, which legalized single-event sports betting, provincial markets have expanded, with private operators entering Ontario’s market in 2022 and Alberta launching a private online gambling market in July 2026. Data indicate that online casino revenues have grown substantially, often outpacing sports betting, reflecting trends observed in provincial platforms.

However, this expansion has been accompanied by increased concerns over problem gambling. Statistics Canada reports a rise in monthly sports gamblers and problem gambling behaviors, such as chasing losses and borrowing money, across Canada between 2018 and 2025. Ontario has witnessed a tripling of active player accounts and a corresponding surge in calls to its problem gambling hotline since privatization of its market.

Experts note the widespread advertising of gambling beyond provincial borders, which may inadvertently promote gambling in regions where it remains illegal or inaccessible. Researchers caution that the normalization of gambling through advertising likely contributes to increased participation and related harms.

Efforts to address these issues include proposed federal legislation aimed at regulating gambling advertising nationwide. Experts emphasize that while regulated markets aim to channel gamblers away from illegal sites, concerns over increased gambling uptake and related harms persist.

The evolving regulatory landscape highlights ongoing challenges in balancing market growth, consumer protection, and the appropriate oversight framework for emerging prediction market products in Canada.