Canadian Regulators Warn Prediction Market Industry: Get Licensed or Face Enforcement
Canada’s securities regulators jointly warned the prediction market industry that no platform has been recognized as a licensed exchange in Canada.
Canada is watching the prediction market boom with growing unease. On April 2, the Canadian Securities Administrators and the Canadian Investment Regulatory Organization issued a joint statement reminding the industry and investors of the rules governing event contracts in Canada.
The message was direct: comply with registration requirements or face enforcement action.
The statement was prompted by what both bodies described as growing interest in prediction markets in Canada. That interest is being driven in part by the explosive expansion of platforms like Kalshi and Polymarket in the United States, where the Trump administration has actively backed the industry’s federal preemption arguments. Canada’s regulatory environment is considerably more restrictive.
What Message the Statement Delivers
The CSA and CIRO were explicit about the current state of the market. No prediction market platform has been recognized as an exchange or registered as a dealer by the CSA. That means no platform operating in Canada is currently doing so in full compliance with Canadian securities and derivatives law. “Anyone trading, or facilitating trading, in event contracts which are securities or derivatives, must follow applicable requirements under securities or derivatives legislation,” the joint release states. Failure to comply, it adds, may lead to enforcement action.
The statement also referenced a CIRO bulletin issued on March 26, which outlined how existing regulatory requirements apply to event contracts. As of that bulletin, only two CIRO members have been authorized to facilitate Canadian client access to event contracts.
Those are Interactive Brokers Canada and Wealthsimple. Even for those two approved firms, the permitted product set is narrow. CIRO’s terms and conditions restrict trading to event contracts involving economic forecasts, environmental forecasts, or financial indicators, and only if they take longer than 30 days to resolve. Sports outcomes, election results, and other political events are explicitly prohibited.
What Is and Is Not Permitted
The distinction between Canada and the US is significant. In the US, platforms like Kalshi operate sports event contracts under CFTC oversight, with the federal government actively supporting their claim to preempt state gambling laws. The Third Circuit Court of Appeals upheld that position just this week.
In Canada, the equivalent of a short-term binary option ban has been in place since 2017. Multilateral Instrument 91-102 prohibits advertising, offering, or trading binary options with a term to maturity of less than 30 days across most CSA jurisdictions. That rule effectively eliminates the core product type that has driven prediction market growth in the US. Most sports contracts resolve within hours or days, well below the 30-day threshold.
The result is that what is permissible in Canada bears little resemblance to the prediction market product available to US users. Questrade, Canada’s largest independent online brokerage, has reportedly expressed interest in obtaining CIRO approval to launch prediction markets as soon as this summer. The April 2 statement makes clear that any such expansion would need to occur within tightly defined parameters and only with prior regulatory approval.
The Polymarket Problem in Canada
The statement arrived in the same week that Polymarket was reported to be distributing promotional materials outside Toronto’s Rogers Centre ahead of Blue Jays games. Polymarket is officially banned from operating or advertising in Ontario following a 2025 settlement with the Ontario Securities Commission, in which the company admitted it had violated provincial rules. The OSC said it takes any such reports very seriously.
Polymarket is now an official MLB partner. Blue Jays games are played in Ontario. The overlap between that sponsorship and the Ontario ban creates an enforcement question Canadian regulators have not yet answered publicly.
A Cautious Path Forward for Prediction Markets in Canada
The CSA and CIRO said they will continue monitoring developments and intend to issue further guidance on how securities and derivatives legislation applies to prediction markets. They also reserved the right to impose additional regulatory restrictions, including changes to the terms already governing CIRO’s two approved members.
The contrast with the US could not be sharper. South of the border, the federal government is actively suing states that try to restrict prediction markets. North of the border, the regulators are reminding firms that the default position is prohibition unless explicit approval has been granted. For any platform considering Canadian expansion, the message is clear: contact your local CSA member and CIRO before proceeding.
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