While prediction markets resembling sports bets continue to attract customers nationwide and clog up courts across the U.S., federal regulators in Canada are taking a markedly different approach than the Commodity Futures Trading Commission (CFTC).
The Canadian Securities Administrators (CSA) and the Canadian Investment Regulatory Organization (CIRO) posted a public notice on Thursday to state that sports event contracts should not be allowed under the country’s federal securities or derivatives legislation that governs financial trading.
“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,” read the joint statement. “CIRO staff do not consider it appropriate to facilitate or approve an application by their dealer members to trade these types of Event Contracts.”
As well as sports and entertainment prediction markets, the CSA and CIRO are assessing whether other categories of event contracts should be excluded.
Strict rules mean Kalshi has limited presence in Canada
So far, there has been little furor in Canada about the kind of sports event contracts that are offered across most of the U.S. by companies including Kalshi, Polymarket, and Crypto.com and in many states by gaming giants such as DraftKings, Fanatics, and FanDuel.
But the regulators noted on Aug. 27 that they felt the need to clarify their position “in light of growing interest in prediction markets in Canada.”
The CSA gives CIRO the right to authorize CIRO member companies to allow Canadians to access prediction markets for trading. Even the ones that gain such approval are highly limited in what they can offer.
To date, only two companies have been approved to facilitate access to prediction markets trading: Wealthsimple and Interactive Brokers Canada. Wealthsimple announced a partnership with Kalshi in June and launched a Wealthsimple Predict platform that hosts approximately 4,000 of Kalshi’s event contracts.
CIRO rules in focus
However, CIRO’s rules lay out strict terms and conditions for such products:
- Only prediction markets that take 30 days or longer to resolve are allowed
- Prediction markets can only be offered on environmental forecasts, financial markets, and economic indicators; sports, entertainment, politics, and other categories are banned
- Although CIRO approval allows companies to facilitate Canadian access to event contracts traded on non-Canadian markets, no prediction market platform has been authorized as an exchange or registered as a dealer
So while Kalshi does have authorization to offer its markets under Canadian federal regulation, it can only offer a highly limited selection of contracts in the country and can only do so on a CIRO-approved member firm’s platform.
“CIRO’s position is clear: prediction-market products are not entitled to enter Canadian markets simply because they exist elsewhere,” a CIRO spokesperson told Canadian Gaming Business in June.
Canadian regulators have penalized prediction market operators in the past for breaking the rules. Polymarket settled with the Ontario Securities Commission, a CSA member, in 2025 after the company admitted it violated the prohibition on short-term yes/no event contracts.
Canadian Gaming Association praises regulatory stance
Similarly to the way in which U.S. states are given the right to legislate and regulate online gambling, Canadian law assigns oversight of gaming to the provinces. To date, only Ontario and Alberta have chosen to legalize commercial sports betting and online casino gaming, while the other provinces maintain that their respective government-owned and operated platform is the only legal one in their jurisdiction.
In a statement on Thursday, the Canadian Gaming Association (CGA) praised the federal regulators for drawing “a clear and sensible line” in the sand.
“Sports wagering is sports betting, whatever the platform, and it belongs within the framework that provinces have built specifically to regulate it,” said CGA President and CEO Paul Burns in a statement.
The CGA added that by issuing the new guidance, the 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.”
CFTC proposed rules take more lenient stance
The Canadian regulatory position differs strikingly from the U.S. situation.
The CFTC has not only reversed course from the previous administration to take a broadly lenient regulatory approach to sports event contracts, but has also shown that it is willing to fight in court against state governors, attorneys general, and gaming regulators for its registrants’ right to offer a sports betting-style product at the federal level.
The litigation surrounding prediction markets in the U.S. has dominated the conversation in 2026. After the U.S. Court of Appeals for the Ninth Circuit ruled 3-0 against Kalshi and other companies on Friday, creating a split in the circuit appeals court system, the issue seems inevitably destined for a Supreme Court review.
