Given all the news and financial activity around prediction markets in the United States, which have grown dramatically to billions of dollars, it makes sense for Canadians to wonder when those platforms would be permitted to operate legally in their nation. 

By the end of 2025, monthly trade volume had increased from a meager $100 million in early 2024 to over $13 billion. Financial media use platforms like Polymarket and Kalshi, which are now a part of major exchanges and crypto wallets, as a source of real-time probability data (see CNN's partnership with Kalshi).

Major sports leagues like the NHL also announced collaborations with Kalshi and Polymarket in October, which gave prediction markets an additional boost as more individuals and businesses began to view them as genuine.

Is it a financial or gambling product? Binary wagers, or bets on a "yes" or "no," or a higher or lower outcome, are available on the platforms. When someone bets on sports, they are wagering against the house, which sets the odds. If a person loses in a prediction market, they are losing to other people rather than the house. Transaction fees are the source of income for prediction market firms.

A market worth billions of dollars

"Will Trump and Machado not shake hands?" was one of the top Polymarket questions of the previous day. "Will Antonio Jose Seguro win the first round of the 2026 presidential election?" (53% yes), "TrumpRX launched by January 31, 2026?" (56% yes), and "90% no handshake."

However, as CBC reported here, someone gained nearly $400,000 on a $30,000 gamble on the overthrow of Venezuelan President Nicolas Maduro by the end of January, rekindling discussion about the risks associated with prediction markets combined with insider, privileged information.

The Commodity Futures Trading Commission (CFTC) oversees prediction markets in the United States.

Prohibited in Canada

In Canada, binary bets, such as those seen on websites like Polymarket and Kalshi, are prohibited.

According to iGaming Ontario's financial performance data from last month, the online sports betting business in Ontario is still expanding rapidly. At CAD $406.2 million, total non-adjusted gross gaming revenue (NAGGR) reached a record, a significant 10% increase from October. Thus, legal sports betting has been widely accepted by Ontarians. Thirty-four of Ontario's 48 licensed igaming firms provide sportsbooks.

However, what if prediction markets were to spread to Canada in the future?

Is There Legal Room to Maneuver?

As described to us by Matthew Burgoyne, chair of Osler's Digital Assets and Blockchain practice and a partner at Osler, Hoskin & Harcourt LLP:

“In December, 2017, Canadian securities regulators published Multilateral Instrument 91-102 Prohibition of Binary Options (MI 91-102),” he said via email. “MI 91-102 defines a binary option as a yes/no contract where payout is a fixed amount if a pre‑set condition is met and zero (or another fixed amount) if it is not, based on an underlying asset or event.

“Since most centralized crypto prediction markets provide for yes/no, fixed-payout event bets, they look and function like crypto-settled binary options, so offering them to retail Canadians may be captured by MI 91‑102’s binary options prohibition. While there is an exemption for contracts with a term of 30 days or more, it likely would not cover typical crypto prediction markets, which generally list short‑dated political and event contracts ranging from hours to a few weeks.”

OSC Penalized Polymarket

A two-year ban from Ontario's capital markets and more than $200,000 in penalties for violating MI 91-102 by selling their product to Ontario investors between June 2020 and May 2023 were part of the settlement reached by the Ontario Securities Commission with the companies behind the cryptocurrency-based Polymarket last April.

People outside of Ontario can use VPNs to circumvent any limitations and access sites like Polymarket, as the CBC reported. The dam is obviously leaking.

However, from a legal standpoint, there is a route to market, Burgoyne informed us.

"Realistically, the path to market in Canada for a large centralized crypto prediction market would almost certainly involve the company applying to provincial securities regulators for an exemption from MI 91-102,” he said. “Canadian securities regulators are expressly empowered under the Instrument to grant exemptions subject to conditions and restrictions as may be imposed in the exemption.”

Route to the Market

Would Canadians, like Americans, flock to prediction markets if that were to occur? Not everyone believes that.

“I think it’s better to focus right now on encouraging more provinces to use their available tools against unlicensed operators, while also providing residents with protections like responsible gaming, anti-money laundering measures, and verification of funds and identity,” said Amanda Brewer, Senior Vice President of Policy and Communications, Canadian Gaming Association.

“If other regions follow Ontario’s example by offering a range of products including prop bets, we’re making solid progress. However, I don’t see much interest at the moment in broadening access to predictive markets, especially since many provinces are still working through their own grey market challenges.”

Many Options for Bettors

According to a senior industry insider, it's probable that prediction markets won't become as popular in Canada as they have in the United States. This is mostly because markets like Ontario haven't imposed restrictions on the number of licensed sports betting firms.

“In Ontario, they have 48 regulated operators,” the source said. “In the rest of the country, they have a gray market of who knows how many servicing the customer base with every vertical, casino sports poker, bingo. So there’s a little need for Canadians to explore these other options.

“My sense is this has become a big issue in the United States because they’ve made a number of poor policy decisions. First they cap the number of (OSB) suppliers at 10 or 12 or so.  Then they require tethering to land based properties. Then in a number of cases, they allow for sports, but not casino.”