Wealthsimple Predict went live on July 29, around four months after CIRO published the terms under which authorized investment dealers could offer event contracts to Canadian clients, and about a month after Wealthsimple first announced the app. Predict runs on Kalshi’s exchange and gives Canadians access to roughly 4,000 event contracts, confined to CIRO’s three permitted topics – economic indicators, financial markets, and climate. Other popular categories, like sports, elections and entertainment, are off the tradable list.
But that doesn’t mean they stay off the screen. Canada’s National Observer reported that Predict displayed markets on the outcome of the next U.S. presidential election showing roughly $55 million in open positions at launch, even though no Canadian user can place a trade on them. A user can watch the number move without being able to touch it.
Two questions follow from the decision to display this information to Canadian users, both discussed below.
What is the Product?
The first question is whether displaying an unavailable market is simply providing information, or something closer to offering or advertising the product itself. CIRO’s approval covers what Wealthsimple may execute as trades, but not necessarily what information the app may display to users. That distinction raises a more fundamental question: what exactly is the product being offered by a prediction market? The most likely interpretation is that the trade is the product.
Under that interpretation, displaying the probability of an election market or sports market that Canadian users cannot trade is market data. This is similar to a brokerage showing a stock’s price. That brokerage isn’t advertising the stock, since the product is the trade, not the number. A prediction market is arguably the same: providing metrics on a market a Canadian cannot enter is simply information, not an offering.
However, one could take a different perspective: the probability itself is the product because it is what users principally consume, particularly because, unlike stocks, there is no separate underlying asset tied to the information. Under this perspective, guidance around displaying CIRO-prohibited markets on regulated sites may be beneficial. However, this information would remain easily-available on other sites, which would limit the value of any restrictions.
Kalshi’s own numbers point toward this second interpretation. Tarek Mansour, the exchange’s CEO, has estimated that 70 to 80 percent of users log in not to trade but to check the forecasts, and has said he wants the platform to become “a reference point for public discourse” rather than a conventional trading product. If most Kalshi users consume the probability itself (rather than trading on it), that cuts against treating the display of election information as incidental to whatever CIRO actually approved. Whether that display function falls inside or outside CIRO’s oversight, and whether it would be treated as advertising an unapproved product if a provincial securities or gaming regulator looked at it directly, is not something CIRO’s published approval materials address.
An Oversight Oversight
The second question concerns regulatory oversight. CIRO’s approval addresses which contracts Canadians may trade, but it does not resolve the broader question of how prediction markets should be regulated when their mechanics begin to resemble gambling.
Canada’s gambling-protection framework, built around federal legislation, provincial gaming regulators, and licensed casino and sportsbook operators, was never designed to reach a CIRO-registered securities dealer. Although prediction-market contracts are treated as derivatives rather than gambling products, their mechanics look similar – a binary outcome and a payout that depends on being right
The applicable consumer-protection requirements, on the other hand, are quite different. A licensed Ontario gambling operator is required to provide, among other measures, self-exclusion tools, deposit limits, as well as to comply with AGCO reporting obligations. A CIRO-regulated investment dealer is not subject to those same gambling-specific requirements, because the dealer is regulated as a securities business rather than a gambling one. The Globe and Mail’s opinion page made a similar argument in early August, framing the launch as a reversal for a company that spent years positioning itself against treating markets like a casino.
Mind the Gap
The regulatory gap has no clear owner. By limiting Predict to specified categories, CIRO’s framework has so far had the effect of avoiding a confrontation with provincial gaming regulators, but will likely do little if (and when) the question is actually asked.
The United States is litigating a version of this question right now, and the answer has varied depending on where the dispute arises. New York’s attorney general launched a lawsuit against Kalshi on July 31, seeking roughly $36 billion and arguing the company is running unlicensed gambling under state law, including exposing users as young as 18 to a product that New York state restricts to bettors 21 and older. The CFTC went to federal court the same day in the opposite direction, seeking to block New York’s enforcement and arguing that the Commodity Exchange Act gives it exclusive jurisdiction over event contracts.
Other states have split further in both directions. New Jersey produced a win for Kalshi, while Massachusetts won an injunction against the company, and Minnesota’s ban on prediction markets was temporarily halted by a federal judge after the CFTC sued to stop it. The result is a patchwork in which courts are reaching different conclusions about essentially the same jurisdictional dispute.
What Now?
For now, products like Wealthsimple Predict occupy a carefully constructed middle ground. Canadians can trade event contracts, but only in categories CIRO has decided fit within the securities framework. They can also see markets that look much more like conventional betting, even when they cannot participate in them. The next regulatory question may come when that boundary starts to move. If sports or election markets become tradable, if a provincial gaming regulator decides the display of unavailable markets is itself part of the product offering, or if prediction markets expand in ways that make the distinction between investing and wagering harder to maintain, Canada may be forced to confront the jurisdictional issue it has so far avoided. The U.S. experience suggests that once that question is forced, there may be no easy way to determine which regulator gets to answer it.
