Canada Signals Tighter Prediction Market Rules as Polymarket Flyers Hit Toronto

Canadian securities regulators have put the prediction markets sector on notice, signalling that tighter rules may follow as enforcement gaps widen and platforms test the limits of existing bans.

The Canadian Securities Administrators (CSA) and the Canadian Investment Regulatory Organization (CIRO) issued a joint notice on April 3, 2026, confirming they plan to release further guidance on how securities and derivatives legislation applies to prediction market trading. The notice landed on the same day The Globe and Mail reported that flyers promoting U.S.-based platform Polymarket were handed out outside Toronto’s Rogers Centre before a Blue Jays game, despite a ban on the company’s operations and advertising in Ontario.

Enforcement Gap in Plain Sight

Polymarket has been prohibited from operating or advertising in Ontario since 2025, when the Ontario Securities Commission (OSC) reached a settlement with the platform after it admitted to violating provincial rules. The OSC fined Polymarket C$200,000 and banned the company from the province for two years.

The Rogers Centre incident put that settlement in sharp relief. In response to The Globe’s request for comment, an OSC spokesperson said the matter was “taken very seriously by the commission” without confirming any specific enforcement action. The CSA’s joint notice warned that failure to comply with Canadian securities and derivatives laws “may lead to enforcement action.”

Canadians outside Ontario can still access Polymarket’s global platform, with some using VPNs to bypass provincial restrictions. Kalshi, one of Polymarket’s main U.S. competitors, officially blocks Canadian access to its platform.

Wealthsimple Opens a Narrow Door

The regulatory statement came the same week that Wealthsimple became only the second firm to receive CIRO approval to offer event contracts to Canadian retail investors, following Interactive Brokers Canada. The approval is narrow. Wealthsimple can offer contracts tied to economic indicators, financial markets, and climate trends only. Contracts linked to sports outcomes or elections are explicitly excluded.

CIRO confirmed in a March 26 bulletin that only two of its members have been authorised to offer event contracts. Questrade, Canada’s largest independent online brokerage, has said it hopes to receive CIRO approval to enter the market as soon as this summer.

The terms imposed on approved platforms require all contracts to have maturity dates of 30 days or longer, ruling out the short-duration binary contracts that have driven growth for platforms like Kalshi and Polymarket in the United States. Under the CSA’s Multilateral Instrument 91-102, in force since 2017, short-term yes-or-no binary options remain banned for all entities not recognised by CIRO.

The Gap With the US

The contrast with the U.S. market is stark. Kalshi and Polymarket operate nationally in all 50 states as CFTC-regulated exchanges, offering sports, political, and financial event contracts. Platforms including DraftKings and FanDuel have launched their own prediction market products. Kalshi reported $1bn in Super Bowl trading volume in February 2026, up 2,700% year-on-year.

Both Kalshi and Polymarket have sought funding at valuations of roughly $20bn. The Trump administration has actively supported the sector’s expansion, including intervening in federal court proceedings on its behalf.

In Canada, no equivalent federal regulator has asserted jurisdiction over event contracts. Securities and gaming regulation are both provincially governed, leaving no preemption mechanism of the kind the CFTC has used in the U.S. to override state-level restrictions. Matthew Burgoyne, a partner at Osler, Hoskin & Harcourt LLP and chair of the firm’s digital assets and blockchain practice, told The Globe and Mail that Wealthsimple’s approval creates “a safe place for Canadian residents to trade these types of contracts,” particularly given the number already accessing unregulated platforms through VPNs.

What Comes Next

The CSA and CIRO indicated further guidance is coming, with the possibility that it results in additional restrictions rather than a liberalisation of the existing framework. Neither Kalshi nor Polymarket has confirmed any plans to seek Canadian regulatory approval.

The regulatory trajectory in Canada points toward a tightly managed opening for financial-style event contracts, with sports and political markets remaining off-limits for the foreseeable future. Whether that boundary holds as U.S. platforms continue to test enforcement and Canadian brokers push for expanded approval will be the key question for regulators in the months ahead. Australia and New Zealand have both moved to classify or restrict prediction markets in 2026, reflecting a broader regulatory pattern outside the U.S.

Source: The Globe and Mail / Canadian Securities Administrators