Canadian Lotteries Push for Tighter Rules on Prediction Markets

Key Points

• Lottery operators say prediction markets are competing with regulated sports betting
• CIRO and CSA clarify sports‑based contracts should not be treated as securities
• Kalshi expands in Canada through Wealthsimple partnership
• Polymarket faces growing restrictions across provinces
• Global prediction market trading volumes exceed 23.9 billion dollars per month

Lottery Operators Raise Concerns Over Event Contracts

Provincial lottery operators are urging regulators to introduce clearer rules for prediction markets, arguing that some event contracts now resemble traditional sports betting products. The Canadian Lottery Coalition says the sector is expanding quickly and could compete directly with regulated gambling offerings if left unchecked.

In comments reported by The Globe and Mail, the coalition said the industry needs action before prediction markets broaden their presence in Canada. It argues that many contracts marketed as financial instruments function similarly to sports wagers, creating overlap with existing lottery and sportsbook products.

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Regulatory Debate Echoes US Disputes

Canada’s regulatory discussion mirrors disputes in the United States, where prediction market operators have faced challenges from state gaming regulators and attorneys general over sports‑related event contracts.

In August, the Canadian Investment Regulatory Organization (CIRO) and the Canadian Securities Administrators (CSA) issued guidance stating that event contracts tied to sports results and entertainment outcomes should not be regulated as securities or derivatives. Their position aligns with concerns raised by US regulators, who argue that many sports‑based contracts operate in practice like unlicensed sports wagering products.

Kalshi Builds Canadian Presence Through Wealthsimple

The debate has intensified following Kalshi’s entry into the Canadian market through a partnership with Toronto‑based Wealthsimple. Announced in June 2026, the partnership gives Canadian users access to roughly four thousand event contracts through the Wealthsimple Predict platform.

For more information on the operator, see Kalshi.

The current offering focuses on economic, financial and climate‑related outcomes rather than sports. Wealthsimple says the product was launched to meet growing demand for alternative forecasting tools. The company serves about four million Canadians and manages approximately 125 billion dollars in assets.

Polymarket Faces Restrictions Across Canada

While Kalshi has gained a foothold through regulated channels, Polymarket continues to face restrictions in several provinces. In July, the platform added Alberta, British Columbia and Quebec to its list of restricted jurisdictions. Ontario users were already prohibited from accessing Polymarket following a settlement with the Ontario Securities Commission.

For Ontario regulatory context, visit AGCO.

Regulatory challenges extend beyond Canada. Around twenty US states are currently engaged in disputes involving platforms such as Kalshi, Polymarket and Robinhood, with regulators arguing that sports‑related contracts should fall under state gambling laws.

The Canadian Lottery Coalition says provincial operators want action before sports‑focused prediction markets establish a larger presence in the country.