The CSA says these products do not belong in securities law, and CIRO staff will not approve dealer applications to trade them
Event contracts tied to sports and entertainment outcomes should sit outside securities and derivatives legislation rather than inside it under tighter conditions, and CIRO staff will not approve dealer member applications to trade them.
That view appears in Joint Staff Notice 91-307, published August 27 by the Canadian Securities Administrators (CSA) and the Canadian Investment Regulatory Organization (CIRO).
The notice delivers the further guidance both regulators signalled in April, which Wealth Professional previously reported could bring additional restrictions on what Canadian clients can access.
Stan Magidson, CSA chair and chair and chief executive officer of the Alberta Securities Commission, said event contracts based on sports or entertainment outcomes should not fall under securities and derivatives legislation.
The notice clarifies the role of Canadian securities regulators on certain types of event contracts, he said in the CSA release.
FAIR Canada backs the clarity in the notice while flagging the risks that permitted prediction market contracts pose to retail investors, the investor advocacy group said in a statement.
JP Bureaud, executive director of FAIR Canada, said regulators should require clear evidence of public interest benefits and safeguards for retail investors before approving further event contracts.
"Innovation alone is not a sufficient basis for regulatory approval," he said.
FAIR Canada said many of these products function more like gambling products than investments that support capital formation, economic growth, market efficiency, or legitimate risk management, and may divert capital away from productive investment.
Dealers that facilitate the trading benefit from higher volumes regardless of whether clients make or lose money, the group added, creating a commercial incentive to widen the range of contracts on offer and a conflict with client interests.
Entertainment outcomes enter the guidance for the first time.
Election contracts, contracts tied to political events or party nominations, and referendums fall outside the notice's scope, and CIRO's existing framework already bans them, according to a previous report by Wealth Professional.
Assessment of other categories of event contracts remains ongoing, the notice states.
Prediction markets occupy what Toronto law firm Wildeboer Dellelce called the "Bermuda Triangle" between securities, commodity futures, and gambling in a legal update on its website.
The firm noted that Canadian event contract authorizations have drawn attention over insider trading and market integrity.
CBC News reported in June, citing a Pew Research Center analysis, that combined monthly global trading volume across Kalshi and Polymarket stood at roughly US$24bn as of April 2026.
Sports contracts accounted for approximately 80 percent of Kalshi's trading volume and 39 percent of Polymarket's since July 2024, according to an advisory from US law firm Arnold & Porter.
Arnold & Porter also noted that the US Court of Appeals for the Third Circuit affirmed a preliminary injunction in Kalshi's favour in April, in a ruling that treated its sports event contracts as swaps falling within the exclusive jurisdiction of the US Commodity Futures Trading Commission.
