Canadian regulators exclude sports and entertainment event contracts from securities oversight

Canadian securities regulators have issued a joint notice stating that event contracts based on sports or entertainment outcomes should not be regulated under existing securities and derivatives legislation. The Canadian Securities Administrators (CSA) and the Canadian Investment Regulatory Organization (CIRO) clarified that they do not consider it appropriate to facilitate or approve applications for dealer members to trade these specific types of contracts.

Currently, prediction market trading in Canada is limited to economic, financial, or climate matters, with platforms like Wealthsimple and Interactive Brokers being the only approved providers. While some argue these products could be classified as financial instruments, others suggest they are more akin to gambling and should fall under the jurisdiction of gambling regulators.

CSA Chair Stan Magidson noted that the notice provides important clarifications regarding the role of regulators. While the assessment for other categories of event contracts is ongoing, the current stance leaves the question of which regulatory body should oversee sports and entertainment prediction markets unresolved.