British Columbia Says Prediction Markets Are Illegal

Canada's securities regulators declined jurisdiction over sports event contracts on Thursday. By Friday British Columbia had picked it up, naming Kalshi and Polymarket and calling their sports and entertainment products illegal. That is the sequence operators should be watching.

British Columbia's Independent Gambling Control Office issued a statement on Friday 28 August clarifying that many activities offered by prediction markets are unregulated gambling and therefore illegal in the province
Under British Columbia's current legislation, products based on sports or entertainment outcomes are gambling, and the office said that includes but is not limited to trading offered on both Polymarket and Kalshi
A spokesperson said any unregulated online gambling or prediction market operator offering products based on sports or entertainment outcomes, and allowing users in the province to access their site, is operating illegally there
The clarification followed the joint notice from the Canadian Securities Administrators and CIRO that such contracts should not be regulated through securities and derivatives legislation
Online gambling in British Columbia is lawful only through PlayNow, operated by the British Columbia Lottery Corporation, so there is no route by which a prediction market could be licensed there

One Regulator Put the File Down and Another Picked It Up Within a Day

British Columbia's Independent Gambling Control Office released a statement on Friday 28 August clarifying that many of the activities offered by prediction markets amount to unregulated gambling, and are therefore illegal in the province.

The office was explicit about the products in scope. Under British Columbia's current legislation, products based on sports or entertainment outcomes are considered gambling, and the office said that includes, but is not limited to, trading offered on both Polymarket and Kalshi.

It was equally explicit about who is caught. "Any unregulated online gambling or prediction market operator that offers products based on sports or entertainment outcomes and allows users in B.C. to access their site is operating illegally in our province," a Gambling Control Office spokesperson said in an email. The test is access, not establishment.

The timing is the point. The office issued the clarification after the Canadian Securities Administrators and the Canadian Investment Regulatory Organization published their joint notice that these markets should not be regulated through securities and derivatives legislation. That notice, issued as Joint CSA and CIRO Staff Notice 91-307, was published on 27 August. The provincial statement followed on 28 August.

The Independent Gambling Control Office is itself new. It became British Columbia's standalone regulator when the province's new Gaming Control Act came into force on 13 April 2026, replacing the Gaming Policy and Enforcement Branch that previously sat inside a ministry. Most third-party guidance still names the old body.

British Columbia is a closed market. Online gambling is lawful only through PlayNow, run by the British Columbia Lottery Corporation, and there is no application process by which a private operator could be licensed. That matters here: the province is not declining to license prediction markets, because it has nothing to license them into.

Declining Jurisdiction Does Not Create a Gap, It Transfers One

The instinctive reading of the CSA notice was that Canadian prediction markets had been left in limbo, supervised by nobody. British Columbia has demonstrated within a day that this is the wrong reading. When a financial regulator says an instrument is not a security, it has not made the instrument unregulated; it has decided which regulator owns it. In a country where gambling is provincial, saying "not securities" is functionally the same as saying "provincial gambling law", and there are thirteen provinces and territories able to act on that. Operators hoping the federal position left room to argue have instead been handed a clearer answer than they had before.

The Access Test Is the Part With Teeth

The province did not say that operators established in British Columbia are illegal, or that operators marketing there are illegal. It said that allowing users in the province to access the site is enough. That is a considerably lower threshold than establishment or promotion, and it does not depend on the operator doing anything in Canada at all beyond failing to geofence. For a business that serves a global order book from a single platform, compliance with a rule of that shape means blocking, not restructuring. It is the same test Nevada has been enforcing, and it travels well.

Two Countries Arrived at the Same Place in the Same Week

Set this beside the Ninth Circuit ruling handed down on 28 August, which held that Kalshi's sports contracts are likely not swaps because the statutory definition contemplates an event with a financial, economic or commercial consequence rather than a sporting result. Within 48 hours, a federal appeals court in the United States and a provincial regulator in Canada, working from unrelated statutes, reached the same conclusion: a wager on a game is not a financial instrument because it has been documented as a contract. The consistency is what should concern the sector, because it suggests the reasoning is not a quirk of any one legal system.

British Columbia has not banned anything new. It has said out loud what the CSA notice implied, and it took a day to do it.