Canada's Regulators Say Sports Event Contracts Are Not Theirs to Regulate

Canada's securities regulators have declined to bring sports and entertainment event contracts inside the securities framework, and told their dealer members not to trade them. Coming a day before the Ninth Circuit reached a parallel conclusion, it leaves prediction markets without a financial-regulation route into two more jurisdictions.

• The Canadian Securities Administrators and the Canadian Investment Regulatory Organization published joint guidance on 27 August 2026 covering event contracts based on sports and entertainment outcomes
• The CSA's view is that such contracts should not be regulated within securities and derivatives legislation, and CIRO does not consider it appropriate to approve applications from its dealer members to trade them
• The guidance was issued as Joint CSA and CIRO Staff Notice 91-307 and applies across all thirteen provinces and territories
• Two CIRO dealer members have already been authorised to facilitate trading in a limited set of event contracts, subject to terms and conditions and to possible further restriction
• The position lands a day before the Ninth Circuit reached a parallel conclusion in the United States, extending a run of state-level defeats for Kalshi

The Regulators Declined the Jurisdiction Rather Than Refusing the Product

The Canadian Securities Administrators and the Canadian Investment Regulatory Organization published joint guidance on prediction markets on 27 August 2026, issued as Joint CSA and CIRO Staff Notice 91-307.

The notice addresses event contracts based on sports and entertainment events or outcomes. The CSA's stated view is that these should not be regulated within securities and derivatives legislation. CIRO, for its part, said it does not consider it appropriate to facilitate or approve an application by its dealer members to trade contracts of that type.

Stan Magidson, CSA Chair and Chair and Chief Executive of the Alberta Securities Commission, said it is important for investors and market participants to understand that event contracts based on sports or entertainment activities or outcomes should not be regulated within securities and derivatives legislation, and that the notice provides clarification on the role and responsibility of Canadian securities regulators in relation to certain types of event contracts.

The guidance is deliberately partial. The regulators noted that assessment continues for other types of event contract not addressed, and that event contracts may fall within the broad statutory definitions of securities or derivatives even where particular instruments do not.

There is also an existing carve-out. To date two CIRO dealer members have been authorised to facilitate trading in a limited set of event contracts. Those members must comply with terms and conditions set by CIRO in consultation with the CSA, and the activity may be subject to further restriction or change.

The notice applies across Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland and Labrador, the Northwest Territories, Nova Scotia, Nunavut, Ontario, Prince Edward Island, Québec, Saskatchewan and Yukon. Canada has no national gambling regulator, so a coordinated position from the securities side is the closest thing available to a single national answer.

Declining Jurisdiction Is a Harder Answer Than Prohibiting the Product

There is an obvious way for a financial regulator to handle prediction markets, which is to regulate them and impose conditions. The CSA has done something different and more consequential: it has said the securities framework is not where these instruments belong. That closes the argument prediction market operators have relied on everywhere, which is that they are financial products supervised by a financial regulator and therefore outside gaming law. In Canada the securities regulators have simply declined to occupy the ground. Operators cannot point to a supervisor who has taken them on, because the supervisor they would have named has publicly said the file is not theirs.

Two Jurisdictions Reached the Same Conclusion in the Same Week

The timing is the part worth noting. The CSA and CIRO published on 27 August. On 28 August the Ninth Circuit 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 the result of a sporting contest. Two regulatory systems with no connection to each other, working from different statutes, arrived within a day at the same underlying judgment: that a bet on a game is not a financial instrument merely because it is structured as a contract. That convergence is a stronger signal for the sector than either decision alone, because it suggests the reasoning is not an artefact of one country's drafting.

The Two Authorised Dealers Are the Detail to Watch

The notice is not a blanket prohibition, and the exception it preserves is the interesting part. Two CIRO dealer members already have authorisation for a limited set of event contracts under conditions, and the regulators were explicit that assessment of other contract types continues. That leaves a supervised, narrow channel open while the sports and entertainment products are pushed out of it. For operators, the practical read is that Canada is willing to host event contracts that have a genuine financial character and is not willing to host the ones that are sports betting by another name. Where that line falls, for the contracts still under assessment, is the question the next notice will answer.

Canada has not banned prediction markets. It has declined to call them finance, which for the sports products amounts to much the same thing.