Canadian regulators say no to sports contracts

• CSA and CIRO issued a joint notice stating that sports and entertainment event contracts should not be regulated as securities or derivatives.
• Two CIRO dealer members, Wealthsimple and Interactive Brokers Canada, already hold conditional approval to offer a narrow set of event contracts unrelated to sports.
• The Canadian Gaming Association welcomed the guidance as confirmation that sports wagering belongs under provincial gaming regulation.

Canada’s securities and investment regulators have said that sports and entertainment event contracts do not belong under securities or derivatives law.

The Canadian Securities Administrators (CSA) and the Canadian Investment Regulatory Organization (CIRO) said in a joint notice issued last week on August 27 that CIRO will not approve dealer members to trade these contracts.

Notice sets the line

Staff Notice 91-307 responds to growing interest in event contracts tied to sports and entertainment outcomes, the category that has powered rapid growth for US prediction markets such as Kalshi and Polymarket.

The CSA and CIRO said these products should not be regulated within Canada’s securities and derivatives framework.

Stan Magidson, CSA Chair and Chair and CEO of the Alberta Securities Commission, said:

“It is important for investors and market participants to understand that event contracts based on sports- or entertainment-related activities or outcomes should not be regulated within securities and derivatives legislation.”

The CSA coordinates regulation across Canada’s provincial and territorial securities regulators. CIRO directly oversees investment dealers, mutual fund dealers, and trading activity on the country’s debt and equity markets, giving the two bodies joint authority over what dealer members can offer.

Two dealers, tight limits

CIRO’s March 2026 bulletin named Wealthsimple and Interactive Brokers Canada as the two dealer members authorized to facilitate a limited set of event contracts, subject to terms set by CIRO in consultation with the CSA.

Those approvals cover just three categories: economic forecasts such as inflation and labour data, environmental forecasts tied to climate indicators, and financial indicators such as US 500 Forecast Contracts. Sports and elections remain excluded.

Even that narrower activity stays under review. The CSA and CIRO said assessment of event-contract categories outside today’s guidance is ongoing, and the existing permissions may face further restriction. Anyone trading contracts that do qualify as securities or derivatives must still meet existing legislative requirements.

A different fight in the US

Canadian regulators avoided the jurisdictional battle now playing out in the United States, where the Commodity Futures Trading Commission’s federal oversight has given Kalshi and Polymarket a legal basis to argue that state gaming regulators are overstepping.

The CFTC’s push toward a formal definition of gaming has only sharpened that dispute, and American Gaming Association chief Bill Miller has sparred openly with the CFTC’s chair over where authority should sit.

The litigation keeps mounting. Connecticut recently filed suit against Kalshi over unlicensed sports wagering, while DraftKings faces a class action alleging its Predictions product is unlicensed sports betting in California.

Ruling sports contracts outside securities law from the outset let Canadian regulators settle the question without entering that same fight.

Provincial framework holds

The Canadian Gaming Association welcomed the clarity. Paul Burns, president and CEO of the CGA, said:

“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.”

Burns added that the CGA expects securities rules to keep evolving as more companies look to enter the space, and said the association stands ready to work with CSA, CIRO, and provincial regulators as further guidance takes shape.

That readiness comes months after PrizePicks pulled out of Canada to concentrate on the faster-growing US prediction market instead.

The CSA and CIRO have said their review of other event-contract categories continues, leaving open how much further guidance, and how much added restriction, is still to come.