Sports, entertainment prediction markets shouldn’t fall to securities law: CSA

If Canada ever wants to allow entertainment and sports prediction market trading, the country’s securities regulators are signalling someone else should police it.

The Canadian Securities Administrators said Thursday that prediction market contracts based on sports and entertainment events should not be regulated within securities and derivatives legislation.

Prediction markets currently let customers make wagers of $1 or less on the outcome of real-world events, like what will happen at the Bank of Canada’s next interest rate announcement or how many major Atlantic hurricanes there will be this year.

Wealthsimple and Interactive Brokers are the only Canadian platforms approved to offer prediction market trading, which is limited in Canada to economic, financial or climate matters.

With the U.S. offering prediction market trading on a much wider array of topics, including sports and entertainment, many north of the border have wondered how the same products could work in Canada.

But there’s a disagreement among regulators, financial services companies and academics over which legislation should theoretically govern sports and entertainment prediction trading.

Some feel it’s a financial instrument and thus, should fall under securities legislation. Others allege prediction trading is a risky endeavour more akin to betting and should be overseen by gambling regulators.

The Canadian Securities Administrators — the umbrella organization of Canada’s provincial and territorial securities regulators who work together to harmonize capital markets rules — did not name who it thinks could oversee sports and entertainment prediction trading but made clear that it doesn’t see the topics as a fit for its members.

Werner Antweiler, an economics professor at the University of British Columbia, said that stance is “a cry for help from the policymakers to define jurisdiction more clearly.”

He figures it’s stemming from pressure to expand prediction market trading topics even further now that two platforms can already offer the service.

“They’re getting lobbied and they feel they need to come out and say, ‘Hey, we’re getting pushed now,'” Antweiler said. “Now, those doors are a little bit open, but they’re now coming here with the crowbar and trying to open it wider and if nobody pushes back, then that leaves the regulator and they need political direction.”

He said it’s up to provincial politicians to decide under whose jurisdiction sports and entertainment prediction market trading could fall.

Wealthsimple appears to disagree with the split regulation model that could emerge if politicians heed the Canadian Securities Administrators’ views.

The Toronto-based financial services company said in an Aug. 4 white paper that assigning gaming regulation to contracts, like those spanning sports, while leaving others under securities jurisdiction is “unworkable and does not reflect the structure of these contracts or markets.”

“A contract on the outcome of a soccer match and a contract on the level of inflation are, mechanically, the same instrument,” Blair Wiley, Wealthsimple’s chief legal officer, and Catherine De Giusti, the firm’s vice-president of product legal and deputy general counsel, said in the paper.

While Wealthsimple is restricted to only offering prediction market trading on economics, climate and financial matters, The Canadian Press found it displaying stakes in who will become the next James Bond, what the score will be at future football games and who will win the 2028 U.S. presidential election.

Wealthsimple spokesperson Victoria Belton said in an email at the time that it makes such topics available in a view-only mode, so clients can follow along.

Asked whether expansion to sports and entertainment was Wealthsimple’s end goal, she said its prediction market product is still in the very early stages and the company is focused “for now” on the markets it currently offers.

In tandem with the Canadian Securities Administrators’ Thursday announcement, the Canadian Investment Regulatory Organization says it does not consider it appropriate to facilitate or approve applications by its dealer members to trade sports and entertainment contracts.

Together, they say the regulatory status of non-entertainment and sports event contracts are still being assessed. Other kinds of event contracts could span political, geopolitical and cryptocurrency.

Fair Canada, a non-profit organization helping investors through advocacy, research and education, is concerned prediction markets function more like gambling products than investments that spur economic growth.

It thinks the expansion of prediction markets may expose retail investors to significant losses, divert capital away from “productive” investments and raise broader market integrity concerns.

“Before additional event contracts are approved, regulators should require clear evidence that they provide meaningful public interest benefits and that robust safeguards are in place to protect retail investors,” JP Bureaud, the executive director of Fair Canada, said in a statement.

“Innovation alone is not a sufficient basis for regulatory approval.”

This report by The Canadian Press was first published Aug. 27, 2026.

Tara Deschamps, The Canadian Press