Wealthsimple approved to offer prediction markets in Canada
Toronto-based fintech Wealthsimple has received regulatory approval to offer event contracts in Canada, similar to those offered by US prediction markets Kalshi and Polymarket.
The news was confirmed to the Globe and Mail, although it says it has not announced any concrete plans to launch prediction market products.
The approval, granted by the Canadian Investment Regulatory Organization, allows Wealthsimple to potentially offer contracts that users can buy or sell, with payouts depending on whether their prediction proves correct.
Wealthsimple is only the second firm in Canada to receive such approval, following Interactive Brokers, which launched similar products last year with certain restrictions, including a ban on betting on election outcomes.
Supporters argue these contracts can help investors hedge against uncertainty. However, critics warn that they closely resemble gambling.
A finance professor at the University of British Columbia, Werner Antweiler, compared it to gambling and had a warning for investors. “Pushing this onto the retail market is asking for trouble. In Canada, we need to be stepping very carefully into this territory, making sure that investors are protected if such markets are allowed,” he said.
Investor advocates have also raised concerns. Fair Canada, which advocates for investors’ rights, has warned that if the products become widely available through mainstream apps, potential harm to retail investors could outpace regulatory safeguards.
Canadian regulators have previously cracked down on similar high-risk instruments, including binary options, though approved firms retain some freedom to offer them.
In the US, lawmakers have introduced several bills to Congress this week that would stop prediction markets from offering contracts on sports, military, and political events.
Charlotte Capewell brings her passion for storytelling and expertise in writing, researching, and the gambling industry to every article she writes. Her specialties include the US gambling industry, regulator legislation, igaming, and more.
Verticals:
Sectors:
Topics:
Dig Deeper
Related stories
2025/11/19: Wisconsin lawmaker warns prediction markets will launch even if sports betting is not approved
2025/11/14: Ontario court permits operators to offer peer-to-peer gaming with players outside of Canada
2025/10/29: Trump Media partners with Crypto.com to offer prediction market
2025/04/23: Prediction markets platform Kalshi files lawsuit in Maryland
2025/11/19: Wisconsin lawmaker warns prediction markets will launch even if sports betting is not approved
2025/11/14: Ontario court permits operators to offer peer-to-peer gaming with players outside of Canada
2025/10/29: Trump Media partners with Crypto.com to offer prediction market
2025/04/23: Prediction markets platform Kalshi files lawsuit in Maryland
The Backstory
Why this approval matters now
Wealthsimple’s regulatory green light to offer event contracts lands at a pivotal moment for markets that blur the line between investing and gambling. Prediction markets have surged in visibility and volume as traders seek ways to price political risk, macro data and sports outcomes. They also test the reach of existing investor protection rules. Canada’s move arrives as U.S. regulators and state authorities wrestle with whether these products belong under derivatives laws or gambling statutes, a clash that is shaping business models and where platforms can legally grow. The stakes are high for mainstream finance apps that want to add new revenue lines without crossing into prohibited territory, and for retail users who can be pulled into volatile products dressed as financial hedges. Wealthsimple joins a small cohort of firms with approval to sell these contracts in Canada, signaling that regulators are willing to experiment — but with guardrails — while watching how similar efforts play out next door.
Ontario’s cross-border shift reshapes the playing field
Canada’s approach does not evolve in a vacuum. A recent Court of Appeal for Ontario ruling opened the door for peer-to-peer online gaming with players outside the country, potentially enlarging liquidity pools and reviving interest in formats like online poker and daily fantasy sports. The decision, as reported in Ontario court permits operators to offer peer-to-peer gaming with players outside of Canada, was backed by four judges and framed as consistent with the Criminal Code under Ontario’s proposed model. Operators argue broader pools can pull users back from offshore sites. Critics warn cross-border play can complicate enforcement and heighten harm in neighboring provinces. For prediction markets, the ruling is a signal that Canadian authorities are open to cross-jurisdictional models if they fit within provincial frameworks, but the court also underscored that cross-border participation requires agreements between provinces. That nuance will matter if platforms try to stitch together liquidity or host markets tied to outcomes beyond Canada’s borders.
U.S. patchwork pressures product design and expansion
South of the border, prediction markets are colliding with a thicket of state rules and federal oversight. A Wisconsin lawmaker has warned that event contracts could fill the vacuum if sports betting approvals stall, highlighting how platforms have capitalized on the legal gray area between derivatives and gambling. In Wisconsin lawmaker warns prediction markets will launch even if sports betting is not approved, Rep. Tyler August backs a bill to keep wagering inside the state’s tribal compact system, arguing it protects consumers and keeps revenues onshore. That position reflects a broader tension: prediction markets can scale rapidly through national apps, but states want jurisdiction and tax control. Meanwhile, operators are pushing back. Prediction markets platform Kalshi files lawsuit in Maryland details how Kalshi argues its sports contracts are federally regulated swaps overseen by the Commodity Futures Trading Commission, not state-regulated bets. Maryland’s cease-and-desist and similar state actions signal a willingness to challenge that framing, forcing companies to litigate where these products sit in the regulatory stack.
Big platforms, crypto rails and political risk converge
Large consumer platforms are moving in, often pairing prediction markets with crypto infrastructure and political content to drive engagement. Trump Media & Technology Group’s pact with Crypto.com to build Truth Predict on Truth Social exemplifies that strategy. As outlined in Trump Media partners with Crypto.com to offer prediction market, the firms plan to list contracts spanning elections, inflation and sports, with execution via a CFTC-registered derivatives venue. The partnership rides a broader boom: trading on event markets has topped $2 billion weekly on some platforms, and private valuations have surged. The pitch is democratized foresight and crowd wisdom. The risk is that political and market incentives blur, especially if platforms spotlight contentious topics that attract trading but heighten misinformation and volatility. For Canadian regulators weighing investor harm, this is the cautionary tale — distribution at social scale can outstrip guardrails, even when a federally registered intermediary sits in the middle.
AI supercharges market creation and settlement
Technology is accelerating the sector’s reach by lowering the cost of launching and resolving markets. U.S.-based Slips introduced AI-generated prediction markets that spin up contracts around trending topics and automate auditing and settlement, according to AI-driven prediction markets debut on Slips betting platform. The app plans to extend from sports and entertainment into futures, commodities and politics, mirroring how crypto-native venues broaden product sets. AI can scale market curation and resolution across thousands of micro events, which may deepen liquidity and diversify risk for sophisticated users. It also raises oversight challenges: faster product cycles mean more potential for user confusion, mispriced risk or opaque settlement logic. In Canada, where regulators have previously banned binary options and scrutinized high-risk retail instruments, AI-fueled experimentation will test suitability rules, disclosures and surveillance systems designed for slower, human-led listings.
What to watch as Canada sets guardrails
Wealthsimple’s approval hints at a calibrated Canadian model: limited market types, bans on certain sensitive outcomes and supervision under existing investment rules. That echoes restrictions placed by other approved firms and contrasts with fragmented U.S. oversight that toggles between derivatives law and gaming compacts. Two dynamics will shape what comes next. First, cross-border liquidity. The Ontario ruling may embolden platforms to seek larger pools, but provinces wary of spillover harms will insist on formal agreements, slowing expansion. Second, product creep. As U.S. platforms test political, sports and macro contracts — and as AI accelerates listings — Canadian authorities will be pressed to clarify which outcomes are permissible and how firms must evidence fair settlement. The lawsuits in Maryland and elsewhere will reverberate, since a clear U.S. precedent on federal preemption could encourage more aggressive rollouts that bleed into Canada via user demand and marketing.
For retail investors, the promise is hedging real-world exposures, such as policy or inflation surprises. The risk is gambling-like behavior in markets that look like finance apps. Investor advocates have warned that mainstream distribution could outrun protections. If trading volumes keep rising and big platforms fuse social content with real-money markets, Canada’s early guardrails will be tested by scale, speed and cross-jurisdictional pressure. How regulators enforce suitability, restrict sensitive categories and police marketing will determine whether these contracts function as legitimate risk tools or another high-velocity retail product that regulators have to rein in after the fact.
