Following financial regulators' declaration last week (August 27) that agreements for sporting events shouldn't be regarded as securities, the Canadian Lottery Coalition (CLC) is advocating for even stronger regulation of prediction markets.
The Canadian Lottery Coalition (CLC)—an alliance of provincial lottery operators including Atlantic Lottery, Loto-Québec, Manitoba Liquor and Lotteries, and the British Columbia Lottery Corporation—is stepping up pressure on regulators to halt the expansion of prediction markets across the country.
“We appreciate the further clarity, but I just feel like it’s too far to say that it’s a line in the sand,” CLC Executive Director Molly Cormier told The Globe and Mail, adding that the coalition has officially registered to lobby provincial officials. “The time to act is now before they expand further in Canada.”
Regulators Establish a Legal Limit
Following a change in financial regulations that allowed for restricted event-contract trading, the coalition launched a lobbying push.
The Canadian Investment Regulatory Organization (CIRO), the national self-regulatory organization that oversees mutual fund and investment dealers, approved fintech platform Wealthsimple in March to offer prediction contracts linked to climate data, financial markets, and economic indicators.
Interactive Brokers Canada Inc. is still the sole other CIRO broker with comparable clearance.
Nevertheless, Canadian authorities are taking a firm stance against gambling on entertainment and sports.
On August 27, the Canadian Securities Administrators (CSA) and CIRO released a joint guidance that expressly rejected the U.S. prediction market model, which Polymarket and Novig operate under Commodity Futures Trading Commission (CFTC) federal oversight.
“It is important for investors and market participants to understand that event contracts based on sports- and entertainment-related activities or outcomes should not be regulated within securities and derivatives legislation,” said Stan Magidson, CSA chair and head of the Alberta Securities Commission.
Public Income Concerns Come to Light
The CLC contends that any event agreements that let users wager on outcomes in the real world are, in essence, gambling and should be governed as such under provincial gaming laws.
The coalition highlights a fiscal divide: profits from private prediction markets go completely to corporate hands, while income from provincial Crown corporations supports healthcare, education, amateur sports, and community programs.
