Canada Tightens Prediction Market Rules as Polymarket Draws $500k in Toronto Election Trading

Canada’s investment watchdog is tightening rules governing prediction markets as Polymarket reports more than US$500,000 in trading volume on the upcoming Toronto mayoral election. Wealthsimple launched its prediction market trading app in Canada in July. (Image: Wealthsimple) First reported in Covers, the Canadian Investment Regulatory Organization (CIRO) has updated its terms and conditions to more expressly prohibit event contracts based on sports or entertainment events or outcomes. “Further to the August 27, 2026 joint CSA and CIRO guidance, CIRO does not consider it appropriate to facilitate or approve an application by its Investment Dealer Members to trade event contracts based on sports and entertainment events or outcomes,” said CIRO in a statement on Oct. 16. “In this respect, CIRO has specifically enumerated such contracts as prohibited in the updated terms and conditions.” Political Contracts Remain Prohibited Under existing CIRO rules, authorized investment dealers can offer only certain event contracts tied to economic forecasts, environmental indicators, and financial markets, with a minimum 30-day maturity period. Contracts involving elections and other political outcomes are prohibited. CIRO is also banning investment dealer members from presenting or promoting non-permitted contracts to clients, such as political betting, so clients don’t mistake them for authorized Canadian products. Last March, CIRO, the national self-regulatory organization that governs investment dealers, mutual fund dealers, and trading activity on Canadian debt and equity marketplaces, along with the Canadian Securities Administrators (CSA), the umbrella organization that coordinates Canada’s provincial and territorial securities regulators to harmonize rules across the country’s capital markets, announced that investment management service Wealthsimple could set up a prediction market. Wealthsimple Predict Launched in July Interactive Brokers Canada Inc. is the only other CIRO investment dealer member to have been authorized to allow trading in event contracts. Wealthsimple Predict went live last July. Despite those restrictions, Polymarket has attracted more than $500,000 in trading volume on Toronto’s Oct. 26 mayoral election. The activity could involve foreign traders, Canadians circumventing geographic restrictions, or both, although the platform’s publicly reported volume does not establish where participants are located. New Canadian Competitor Emerges For those following the Toronto election, set for Oct. 26, Brad Bradford is at 50% ($201,762 volume), while incumbent Olivia Chow is 49% ($258,735 volume). Wealthsimple and Interactive Brokers Canada Inc. might soon have some competition in the prediction market space, with the Globe and Mail first reporting earlier this month that a team of financial leaders headed up by former Vanguard Canada CEO Atul Tiwari had filed an application seeking registration as an investment dealer and member with CIRO so they could launch a regulated platform offering event contracts, called VerdX. The post Canada Tightens Prediction Market Rules as Polymarket Draws $500k in Toronto Election Trading appeared first on Casino.org.