Canadian Regulators Uphold Event Contract Ban on Sports, Entertainment Predictions

Canada’s investment and securities regulators have spoken. The sports and entertainment event contracts that dominate U.S. prediction markets are prohibited.

On Thursday, Canadian Securities Administrators (CSA) and the Canadian Investment Regulatory Organization (CIRO) issued a joint notice upholding the ban on sports and entertainment-related contracts.

While the notice recognized that event contracts “may fall within the broad definitions of securities or derivatives” under Canadian law, it reiterated that “certain instruments” fall outside that framework. 

With this latest guidance, that’s where sports and entertainment contracts remain: off-limits.

The two bodies shared a united stance:

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 do not consider it appropriate to facilitate or approve an application by their dealer members to trade these types of Event Contracts.”

This latest update follows a CIRO bulletin published on March 26. 

With that notice, the regulator reminded members that Canadian law prohibits contracts based on the outcome of elections or political events. 

In yesterday’s updated guidance, the bodies said other event contract categories remain under review and further guidance would follow. In the meantime, they reiterated that the only categories permissible for trading involve economic, environmental or financial indicators. 

They also reminded members that short-term binary options (with a maturity of less than 30 days) cannot be issued to individual investors. Even if allowed, that rule would prohibit many of the sports and entertainment contracts popular south of the border.

Prediction Markets Function Differently North of the Border

As we’ve covered before, prediction markets in Canada function differently from those operating in the United States. 

In the U.S., states regulate gambling, and the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) oversee different classes of financial instruments. The former regulates securities such stocks and bonds, while the latter primarily regulates derivatives, including futures, options and swaps. That means prediction markets, considered derivatives under U.S. law, are under the CFTC’s control.

In Canada, the CSA operates as an umbrella connecting provincial and territorial securities regulators. Then there’s the CIRO, the investment sector’s national, self-regulatory body. But as with Canadian gambling oversight, the provinces and territories ultimately control financial securities.

Legally, Canadians can wager on real-world events on just two regulated platforms: Interactive Brokers’ IBKR Forecast Trader and Wealthsimple’s Predict. Questrade has also signaled its intention to offer contracts but has not yet received regulatory approval. STX, an exchange licensed in Ontario, is also seeking CFTC registration.

The ban on short-term, yes-no event contracts, or “binary options”, further complicates things.

The CSA banned their sale in 2017 over fraud and investor risk. The prohibition blocks advertising, offering, selling, or trading options that mature in fewer than 30 days. Provinces can opt out, but only one (British Columbia) has. Instead, BC developed an independent binary option framework that bans short-term plays. 

This rule excludes the type of short-term contracts that are increasingly popular in the U.S.

Wealthsimple Argues for Regulatory Change

In early August, Wealthsimple published a white paper titled, “Prediction markets in Canada: a principled regulatory framework”.

In it, Wealthsimple lawyers argue that Canada should shift its regulation to allow short-term binaries. It also suggests Canada allow currently prohibited categories, including elections, entertainment, and sports. 

As the white paper noted, the combined monthly volume of dominant operators Polymarket and Kalshi (the exchange through which Wealthsimple routes its customer’s prediction market orders) in Canada rose from under $5 billion in September 2025 to roughly $24 billion in April. Since then, that volume has continued to grow.

The paper didn’t mention the intensifying legal battles between prediction platforms and state and tribal interests, primarily over sports-related contracts. Nor did it note that growth is buoyed by the CFTC shifting its interpretation of its own rules and stepping into those ongoing battles on behalf of the industry it regulates.

Gambling Insider emailed Wealthsimple for its comment on the latest guidance but did not receive a response.

We also reached out to CIRO with questions about current and future guidance. 

In an email, a CIRO spokesperson reiterated the April guidance on political and election contracts. They also noted the same bulletin specified Canadians may not trade in event contracts “based on the outcome of unlawful activities under Canadian federal, provincial or territorial law.”

This week’s update, they added, followed “interest in event contracts based on sports and entertainment events and outcomes.”

In response, Canada’s oversight bodies published clarifying guidance.

CIRO and the CSA issued new guidance yesterday which clarifies that sports and entertainment contracts will not be permissible by CIRO and will not be allowed to be traded under Canadian securities and derivatives regulation.”

Future advisories, the spokesperson added, “will be issued as required.”

CGA Welcomes New Prediction Market Guidance

The Canadian Gaming Association (CGA), which represents Canada’s gaming, sports betting, eSports, and lottery industries, echoed the American Gaming Association’s stance on prediction markerts.

The CGA welcomes the guidance , Paul Burns, president and CEO of the trade group, said in a statement:

The CGA has long held that sports wagering, in whatever form it takes, should be offered only through provincial gaming regulators, and that the framework governing a product should be determined by what it does, not by what it is called. Today’s guidance affirms that principle, as CSA and CIRO have drawn a clear and sensible line: the distinction between a sports contract and a sports bet should not be reduced to semantics.”

The advisory, he said, “brings clarity to a question that matters a great deal to Canadian consumers, provincial governments, and the licensed gaming industry.”

Burns also recognized that Canadian securities regulations may evolve as more companies potentially seek market access and said the CGA would work with regulators if that happens.

“Online gaming and sports betting are entertainment products,” he stated.

“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.”