Canadian lottery operators are calling for tighter controls on prediction markets, warning that event contracts are increasingly competing with licensed sports betting products and could divert gambling revenue from the regulated market.
Prediction markets allow users to buy contracts linked to the outcome of real-world events. The sector has expanded rapidly, with global trading volume already exceeding $23.9 billion per month. Sports and politics have become two of the most actively traded categories.
Lottery sector warns of growing competition
The Canadian Lottery Coalition (CLC), which represents provincial lottery operators, is pushing for clearer rules governing event contracts before prediction markets expand further across Canada.
According to comments reported by The Globe and Mail, the coalition argues that some event contracts closely resemble sports betting products even though they are presented as financial instruments. CLC representatives are calling for regulatory action before prediction markets gain a wider foothold in the country.
On August 27, 2026, the Canadian Securities Administrators (CSA) and the Canadian Investment Regulatory Organization (CIRO) issued joint guidance on prediction markets. They said event contracts based on sports and entertainment events or outcomes should not be regulated under securities and derivatives legislation. CIRO also said it would not consider it appropriate to facilitate or approve applications from its dealer members to trade such contracts.
Kalshi enters Canada through Wealthsimple
The debate intensified after Kalshi entered the Canadian market through a partnership with Wealthsimple. In June 2026, Wealthsimple announced its standalone Wealthsimple Predict platform, giving users access to approximately 4,000 Kalshi event contracts.
The initial offering was limited to categories authorized for the Canadian market - financial markets, economic indicators and climate-related events. Sports contracts were excluded.
Polymarket faces further restrictions
Polymarket, another major prediction market platform, has also faced restrictions in Canada. In July 2026, it expanded its list of restricted provinces to include Alberta, British Columbia and Quebec. Ontario already has restrictions following a settlement with the Ontario Securities Commission.
The Canadian debate is part of a broader international dispute over how prediction markets should be regulated. In the United States, state regulators increasingly argue that sports-related event contracts effectively function as wagering products and should therefore fall under state gambling laws.
Source: SiGMA World
