Canada reiterates securities rules apply to prediction markets
Table of contents
- The CSA and CIRO issued a joint notice on 2 April 2026 reminding industry participants that existing Canadian securities and derivatives laws apply to prediction markets and event contracts.
- Only two CIRO-authorized members, Interactive Brokers Canada and Wealthsimple, may currently facilitate a limited set of event contracts for Canadian clients.
- Regulators warned that non-compliance may result in enforcement action and signaled that further guidance, which could tighten existing terms, is under review.
Canada’s top securities regulators have restated that existing laws governing prediction markets and event contracts remain fully in force, warning industry participants that non-compliance may result in enforcement action.
The Canadian Securities Administrators (CSA) and the Canadian Investment Regulatory Organization (CIRO) issued a joint notice on 2 April 2026, responding to growing interest in prediction markets among Canadian investors and industry participants.
The notice does not introduce new prohibitions. It reiterates that anyone trading or facilitating trading in event contracts that qualify as securities or derivatives must comply with applicable registration and recognition requirements under Canadian law, according to the CSA/CIRO notice.
What is currently permitted
Per the CSA/CIRO joint notice and the CIRO bulletin published on 26 March 2026, only two CIRO Investment Dealer Members, Interactive Brokers Canada and Wealthsimple, are currently authorized to facilitate Canadian-client access to a limited set of event contracts.
Those contracts are offered on, and traded through, foreign-regulated prediction market platforms.
The permitted product types are narrow: contracts tied to economic forecasts, environmental forecasts, and financial indicators only. All must carry a term to maturity of 30 days or longer.
Contracts tied to sporting events, elections, or other political outcomes remain prohibited under CIRO’s terms and conditions.
Crucially, this authorization does not amount to domestic recognition. Per the CSA/CIRO notice, no prediction market has been recognized as an exchange or registered as a dealer, or exempted from those requirements, under CSA oversight.
The two authorized firms access foreign-regulated markets. No Canadian-domiciled prediction market platform holds equivalent standing.
Compliance risk restated
Multilateral Instrument 91-102 prohibits the offering, selling, trading, or advertising of binary options with a term to maturity of less than 30 days in all CSA jurisdictions except British Columbia, which maintains its own separate regulatory framework.
This is a prohibition on short-term binary contracts specifically, not a blanket ban on all event-contract products.
The compliance risk is already visible. Polymarket was subject to an Ontario Securities Commission settlement in 2025, resulting in a penalty of approximately CA$243,000 and a two-year ban from operating in the province, after the company admitted it had offered binary options to Ontario investors in violation of provincial rules.
The Globe and Mail reported in late March 2026 that Polymarket promotional materials were distributed outside Toronto’s Rogers Centre before Blue Jays games, in apparent contravention of those settlement terms.
Legal commentary has noted that prediction markets in Canada face overlapping gambling and securities regimes that severely restrict their operation, as event contracts resemble both gambling products and financial derivatives.
Federal gambling prohibitions under the Criminal Code, combined with the CSA’s binary options ban, leave little room for independent platforms to operate outside CIRO’s authorized framework.
Further guidance expected
The CSA and CIRO stated in the 2 April notice that they will consider whether additional regulatory action is required, including potential changes to the terms and conditions currently imposed on CIRO’s two authorized members.
Any industry participant considering entering the Canadian market is directed to contact their local CSA member and CIRO before doing so.
A different world from the US
Canada’s regulatory posture is in sharp contrast to the United States, where federally regulated platforms such as Kalshi and Polymarket operate nationwide under Commodity Futures Trading Commission oversight, offering sports contracts, election markets, and short-term binary outcomes to retail traders.
Both platforms are facing a rising tide of legal challenges in the US. State gaming regulators and attorneys general have already taken them to court, arguing the platforms operate as unlicensed sportsbooks outside state gambling frameworks.
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