Prediction markets face regulatory battles in US and Canada

Prediction market platforms are currently engaged in a significant legal and regulatory struggle regarding their classification. In the United States, companies such as Kalshi, Polymarket, and the Coalition for Prediction Markets have spent at least $3 million on lobbying and campaign contributions to influence federal and state-level regulations.

A central conflict exists between federal and state authorities: prediction market companies argue their services are financial swaps regulated by the Commodity Futures Trading Commission (CFTC), while many state attorneys general contend they are gambling operations subject to state laws. A coalition of 44 state attorneys general has argued that CFTC regulation should not preempt state gambling laws, describing the platforms as a “new form of casino.”

In Canada, the Nova Scotia Securities Commission (NSSC) is addressing emerging investment complexities, including prediction markets, event contracts, and crypto assets. The NSSC is hosting educational sessions to help investors understand the risks and legal frameworks surrounding these evolving financial instruments and to identify potential investment frauds.