The Decibel - Prediction trading is coming to Canada

Episode Date: March 30, 2026

Prediction trading is exploding in popularity, with the industry set to rake in about US$2 billion in revenue this year alone. Companies like Kalshi and Polymarket have popularized the practice, which lets you bet on nearly anything – from Taylor Swift’s marriage status to election outcomes. This past week, Canadian company Wealthsimple cleared hurdles to offer Canadians something similar, but the rules will be different here and a fragmented system makes regulation tricky. The Globe’s retirement and financial planning reporter Meera Raman broke the Wealthsimple news. She joins us to explain what the market may look like in Canada and the challenges regulators face in protecting investors. Questions? Comments? Ideas? Email us at [e-mail]. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Canada is getting into the market of prediction trading. This practice has become wildly popular through companies like polymarket and Kalshi, where you can put money on pretty much anything, like if Taylor Swift will get married before June 30th this year, or whether the U.S. will take over Karg Island in Iran. A Canadian company, Wealth Simple, has received approval to offer a version of this to Canadians. The Globe's retirement and financial planning reporter, Mira Raman, broke the story for the globe. Today, she joins me to explain the unique challenges of regulating this type of investing in Canada

and what will and will not be allowed. I'm Cheryl Sutherland, and this is The Decibel from The Globe and Mail. Hi, Mira. Thanks for coming back on the show. Yeah, thanks for having me. I'm so happy to be here. So I think many of us probably have heard about prediction trading on platforms like Polymarket by now. We had a few examples in the intro, but people are betting on pretty much anything here. But I like to establish exactly how this works. Can you walk me through that?

Yeah, for sure. So for the uninitiated, prediction market trading basically lets people, as you said, bet on whether a specific event will happen by a specific date. So it's usually a yes or no question. So like you said, will the Bank of Canada raise interest rates by the April decision date? Yes or no. People can bet on the yes side of that contract or the no side of that contract. Okay. And so how do people make money? How it works is, for example, if you see the yes contract trading at 30 cents, that usually implies that there's a 30% chance of this event occurring. It gives, you know, a little bit of a sense of how people are feeling. So let's say you buy that yes contract for 30 cents. One trade costs 30 cents. If you are correct, you are paid out $1 per trade that you bought. If you lose, you get nothing.

Okay. That makes sense to me. And when you do, say, make a yes or no bet, can I call it a bet here? I think so. Okay. So if you make one of those, can you change your mind? Can you move? Yes. So that's the big difference in prediction trading than traditional betting. So you can actually change what your bet is as new information emerges. As you're reading the news and say, okay, my bet doesn't look like it's going to happen. You can actually adjust your position in real time. Mm-hmm. We talked about how in the U.S. you can bet on pretty much anything, right? Can you give me some other examples? For sure. I think the ones that are most entertaining to me are ones that are like, are Justin Trudeau and Katie Perry going to get engaged before the end of June? Or will Jesus return in 2026? These are the kinds of trades that get a lot of attention. But I would say the most popular ones are definitely sports betting on sports games and election outcomes. Mm-hmm. There's also been some controversial bets where people have. have made quite a bit of money. Tell me about one of those. Yes. So an anonymous trader made over $400,000. Yes, you heard that. American dollars on Polly Market in January, placing a bet

that the Venezuelan president, Maduro, would be removed from power. So why this was very controversial is because it raised questions that this trade may have, you know, been given with non-public information, aka insider trading. So there is a lot of controversy. controversy around this trading in the U.S. right now. It's drawing a lot of scrutiny. Okay, that's the U.S. Let's talk about what's being allowed here. Yeah, what's different. So this week, as you said, I broke the news that Well Simple cleared a regulatory hurdle to be able to offer this type of trading. Well Simple got regulatory approval from the Canadian Investment Regulatory Organization. A mouthful, we'll call them zero here because that's easier to say. So Ciro, which basically manages the investment industry at a federal level, they gave them this approval in collaboration with the Canadian securities administrators, which is kind of representative of all the provincial regulators.

Great. And what did they approve exactly? They approved them to be able to start offering these types of trades, these types of yes or no contracts that we're talking about when we talk about prediction trading. So this trading does not look that similar to what's operating the U.S. West right now. And why that is is that there's very strict limitations of what companies who have this approval are going to be able to offer. So for example, they can't do this super popular stuff like sports betting or these very political questions. What they're able to do is in very strict bucket. So that will be economic indicators, financial markets, and climate trends. And that's pretty much it for now. Okay. Can you give me some examples of the kinds of questions?

wealth simple might have. Yes, I can. So the types of questions that they may have, we don't know for sure yet because they haven't rolled this out, but they could be related to economic statistics related to, for example, inflation rates or labor markets. So a possible question could be, will the unemployment rate be above or below 8% in January, for example?

So there will be questions that are related to, you know, labor market interest rates, inflation rates, things that would be hard to manipulate. Okay. When will Well Simple start actually carrying out these contracts? That's what they're being called, right? These contracts, I think they're questions, but that's kind of the term that they're using. Yes, they are called contracts.

What Zero is calling them are actually called forecast contracts. They've been called event contracts. For simplicity's sake, we can say forecast contracts. As to when they will roll this out, that is a big question mark. Well Simple has not announced that and has not announced any products that would go along with this. How big of a change is this for Canada? Like what was allowed before? So pretty much before this, these types of contracts were largely banned in Canada.

And that's very much hinged on this 2017 ruling. So we're going back almost 10 years ago to this ruling that banned these types of yes or no contracts. So if we go back a little bit, the Canadian Securities Administrators, the CSA, made a ruling in 2017 that banned the sale of short-term yes or no contracts. And they called these contracts binary options. So binary because there's only a yes or no option. And why did they ban them? So at the time, this was before prediction markets were even really a thing or in the mainstream.

At the time, definitely no Canadian companies had authorization to offer any type of these contracts. So when these were being offered in 2016, 2017, they were pretty much all fraudulent. at the time. So people who saw these maybe on social media and were participating, Canadians, they were just losing all of their money, whether they got these contracts right or wrong. So this was the CSA hoping to approach this problem and just ban them outright. Okay. So in this case, it sounds like the companies were not being totally truthful when it came to someone making a predictions. If they put yes or no and if they were correct, they weren't getting their money back at all. Correct. There was just a lot of fraud going on at the time.

Okay. What about Polymarket, which we know is the very popular platform, does it operate in Canada or has it at any point? Yeah, so even though there was this 2017 ruling, it's not like this ruling explicitly said, prediction markets are banned in Canada. It's kind of a gray area, even though they fall under this 2017 ruling, I guess it didn't explicitly say that, but Polly Market did operate in Ontario for three years. And eventually, the Ontario securities regulator last year were saying, hey, hey, hey, wait a second. This is exactly what was banned under this 2017 ruling. So we are going to crack down on you and not allow you to operate in Ontario. So they actually were trading in Ontario for three full years. Wow. And what about the rest of Canada? Is polymarket banned banned market bans there? I mean, no provincial regulator has explicitly banned polymarket from operating in their province. However, under the precedent set in the 2017 ruling, technically they wouldn't be allowed. But I, I, I Again, it's complicated. Right.

Can Canadians still use platforms like Polymarket, even though it's not allowed? Like, are they going around these regulations, perhaps, to be able to make these investment choices, I guess we can call them? Yes, they are. Like, even though, you know, people might say like, oh, polymarket, Kalshi, they aren't a thing in Canada. Yes, they are. Canadians are finding a way to participate in these markets. How they're doing that mostly is they're using VPNs, which are virtual private. networks that can basically disguise your location and show that you're anywhere in the world.

So they'll say that there's somewhere else in the world and they'll start making bets on polymarket. Okay, so prediction trading wasn't really allowed in Canada, even though lots of people who are going around the restrictions. But one company was given approval last year. Can you tell me about that? Yeah. So in 2025, interactive brokers, which is a pretty big, you know, firm here in Canada,

got this same approval that Well Simple did. This kind of flew under the radar, and no one really knew about this, mostly because, you know, this was available to Interactive Brokers client specifically. So it wasn't talked about as much. But, yeah, there is a precedent. So Well Simple saw the company got this approval and said, hey, we're going to lobby for this as well. Right. And in the case of Well Simple, they're offering it to retail investors. So that's kind of what's different here. Exactly. Well, Simple is offering their client base is retail investors, is everyday Canadians. So this is really. pushing it into the masses. We'll be right back. So we're now seeing that there is regulation to kind of approve this type of investing in Canada.

Why is this being allowed now? Like, what has changed? It's a great question. I think a lot of it has to do with the fact that Canadians, like we just talked about, are already using these platforms. And regulators are starting to acknowledge that, right? They're saying, okay, we know this is popular. we should give a regulated way in Canada for Canadians to be able to participate in this. Also, the prediction markets industry has just expanded so much in recent years.

It was really reaching, you know, great heights in the U.S. 2024 election. That's when a lot of people started betting. And since then, it's just skyrocketed. Just for context, the prediction markets industry has an annual revenue of about $2 billion U.S. dollars. and it's expected to reach more than 10 billion U.S. dollars by 2030. So that's just giving you an image of the growth here. So I think regulators are starting to acknowledge, like, this is a thing that's not going away. So let's, you know, make this regulated and try to protect investors in Canada.

And, I mean, this might be an obvious question. But what's the sell for companies, Canadian companies like Well Simple? Like, why do they want in on this? Well, I think a lot of companies are acknowledging that there's a hunger. for retailers in the country to want to participate in this type of trading. And especially among younger clientele as well, prediction markets trading is very popular with Gen Z millennial cohorts. It is the advertisements are almost targeted towards them. So I think that there is a lot of opportunity and these companies acknowledge that.

What does it mean for Well Simple's reputation as a financial institution? Because I know, when I think about this type of prediction markets, it's a bit unsurious. I don't know if that's a fair thing to say. But does this do anything to their reputation as a financial institution? We could talk about the reputation of predicts of orchestrating as a whole other conversation. But, you know, Well Simple has a reputation of innovation. So when we look at it from that perspective, this actually isn't that surprising that they're one of the first companies to kind of jump on this. But also after this news broke, a lot of people see Wealth Simple.

They have one of the advertisements of, you know, building money slowly, right? And I think a lot of people might think that that goes against that. But, you know, this is kind of an investment tool that we can't ignore. So Well Simple may be, you know, one of the first, but they will definitely not be the last. And what's the argument for regulating this? Like, what's the concern from the regulators for the average investor? Like, what are they trying to protect? So we're seeing a lot of scrutiny come out of the U.S. right now that a lot of the danger around this is that it, one, resembles gambling.

Two, is susceptible to manipulation and insider trading. So regulators are, you know, starting to allow companies to do this, but in very strict ways, kind of a slow rollout, right? We don't know if they're going to allow more in the future, but they are being very strict right now to say, hey, we acknowledge this is a thing, but we want to do in a way that is as safe as possible. for Canadians because they know what's happening, so why not try to make it as safe as possible? I'm glad you brought up gambling because I keep saying investing in markets, but it does appear and people have called it gambling, right? Why is this being regulated under investing? Is it being considered gambling? From regulators at the moment in the U.S. and in Canada, it's not being considered as gambling. That's confusing. I acknowledge that. We're talking about betting on things. But right now,

these are being considered as, you know, financial products. And a lot of people argue that, you know, this actually will be helpful for investors, especially in times of economic uncertainty. They see it as a financial hedge in people's portfolios, that they can use these, especially for these unmanipulative questions like, will interest rates rise or fall this month, that actually could be an important part of someone's larger financial plan. So, yeah, it's a controversial question. And I'll say that. And I guess the argument on the other side would be that it is not any different than the stock exchange, for example. Exactly.

I mean, you know, if people are stock picking, they're counting on company or not counting on a company to do well or not, right? So there's many arguments here. And I think there's valid points on all side, to be honest. Yeah. Have you heard anything from experts or politicians about these concerns around gambling? Yes. So this week, I was able to. to talk to a UBC professor who actually ran his own experiment over two decades running a prediction

market that was totally non-for-profit. And his conclusion is that prediction markets are, quote, gambling in disguise. To be fair, he was referring to prediction markets that offer, you know, elections and sports, as well as these type of high-risk contracts. But, yeah, he does say that, you know, there are some risks. And we're seeing those risks play out in real time. For example, in the U.S., there are a pair of U.S. senators that are actually introducing legislation called the Prediction Markets Are Gambling Act. And this act would essentially ban prediction markets like Pauly Market and Kalshi from offering contracts tied to sporting events, for example.

We talked about how Canadians can just use a VPN, right? Like, does it matter if it's regulated? I think a question that's come up in my reporting this week has been, If companies start allowing this, but it's very strict, like, are Canadians still just going to go through their VPN anyways and still do the bets that they want on polymarket and kind of the, you know, for lack of a better word, unsexy bets that are being offered in Canada. So what it is is that companies are held to a higher standard. It's still on the shoulders of the investors to protect themselves and do their research. But the companies that are approved to this, investors can have some, you know, comfort knowing that they're being held to quite a high standard and polymers. market, you know, in the Canadian context may not be.

Let's talk about the regulation itself. What will regulation look like for these prediction markets in Canada and who is responsible for it? Yeah. So unlike the U.S., which has one federal entity that kind of looks over prediction markets trading, Canada's is a little bit more of a patchwork maze, as I like to call it. So we have some federal entities, like I mentioned.

we have CERO and CSA, each province also has its own provincial or territorial regulator. So, for example, these approvals that Well Simple got, that allows them to operate across Canada because this approval was in collaboration with the CSA, which represents all the provincial regulators. But at the same time, each provincial regulator has the power to bar a company from operating in their jurisdiction. We saw that with the polymarket decision in Ontario, right? So the answer is it's complicated. Yeah. So this is being regulated at a national level by zero. But in fact, each province could make their own decisions outside of that. Correct. Okay. So it was zero that gave approval to Well Simple. What role do they have in this? Zero is the one that has set out the rules

that companies have to abide by when it comes to what contracts that they are offering. They're the ones that set the rules of, okay, you can only offer ABC contracts and they're very strict. If a company deviates from that, Zero is the one that's going to say, hey, hey, you can't do that. And if you do, then you may lose your approval. So that's Cero's responsibility here. Beyond that, it's really largely on the investors' shoulders to really evaluate the risk associated with these contracts. We talked about gambling a little bit earlier on. I'm just curious, does the regulator ever take into consideration other harms beyond losing money?

I mean, I'm sure the regulator, that's kind of what they're trying to do, right, to protect the investor against losing money. But do they think about potential addictive gambling habits? Like, these are concerns that are being raised with these platforms. So are they looking into that part of the conversation as well? This is such a new landscape in Canada. I am sure that Sero and other provincial regulators are having discussions around, okay, what are the risks here? But because this is so new, we don't know much about what the risks are in the Canadian landscape yet. Right.

Mirro, what's the response been like to this news that prediction markets are coming to Canada? I think there's been a very mixed response. I think on one hand, because of how popular prediction markets are people, some people are like, okay, finally. This is starting to become a thing in Canada. But on the other hand, I think a lot of people are really nervous. You know, especially right now, I feel like we're kind of at the height of scrutiny of prediction markets trading, especially with, you know, all this news we're seeing out come out of insider trading and people losing a lot of money. So I think there's a little bit of nervousness on one side. And on the other side, there's kind of like, okay, about time.

So is there a sense that this is just a start, that this could. open the floodgates in Canada like we've seen in the U.S.? Like could we start seeing other financial institutions looking at this as a way to get into the prediction market? 100%. Like, for example, this week I talked to Questrade, which is one of WellSimple's biggest competitors. And they told me that they are also applying for approval. They're in the process of applying for approval.

They haven't gotten yet. But they said that they are expecting to launch this summer. So that just proves to you right there that, you know, firms are jumping on this. you know, well, Simple may be the second, but they will 100% not be the last.

In terms of what kinds of contracts will be able to be offered in Canada, as we said, want to make clear, it's quite strict what we are allowed

to do right now, but some experts I talked about said, you know, this could kind of be very much the first step that there could be

some in the future loosening of what contracts could be offered and we could start offering some of the contracts that are available in the U.S.

But we'll have to wait and see. Mira, thanks so much for coming to the show. Really appreciate it. Yeah, thanks for having me. That was Mira Rahman, the Globe's retirement and financial planning reporter. That's it for today. I'm Cheryl Sutherland. Our intern and associate producer is Finn Dermow.

Our producers are Madeline White, Rachel Levy McLaughlin and Mahal Stein. Our editor is David Crosby. Adrian Chung is our senior producer. and Angela Pichenza is our executive editor. Thanks so much for listening.