Canadian Lottery Operators Say Prediction Markets Need More Clarity

Prediction markets continue to encroach on sports betting territory, and this has led to a serious legal debate in the United States. Now, Canada is increasingly scrutinizing these platforms, with provincial lottery corporations calling for more clarity on the sector

Canadian Lottery Operators Say Event Contracts Need More Restrictions

According to the Canadian Lottery Coalition, prediction markets are increasingly resembling sports gambling, even though the platforms are insisting that the type of product they actually offer is a different one – a financial product with the odds not set by a central authority, and peers trading against peers on market outcomes.

The operators argue that event trading platforms have already dented revenue from provincially regulated gambling, because of how closely related the products are. In a statement, cited by the Globe and Mail, the CLC said:

“We appreciate the further clarity, but I just feel like it’s too far to say that it’s a line in the sand. The time to act is now before they expand further in Canada.” 

In the meantime, CLC has not been the only entity – or group of entities, rather – to raise questions over the legality and exact status of event contracts. 

In August, the Canadian Investment Regulatory Organizaiton (CIRO) and the Canadian Securities Administrators noted that event contracts that are tied to sports outcomes or entertainment should not be regulated as securities and derivatives, which is the same argument put forward down south in the United States by attorneys general and gaming regulators.

Gambling Revenue Already Lost

This debate rages at a time when an increasing number of young people are perceiving prediction markets and sports betting as a path to financial independence, and an internal cog to a viable investment strategy. 

Mounting pressure on the sector has been met with an even firmer opposition. Neither Kalshi nor Polymarket is backing down, with betting revenue constituting the bulk of all trades on the platform. 

Similarly, a CNN analysis recently discovered that platforms are accepting billions from under-18 individuals, a particularly important point, as while event contracts on sports are “not betting,” they still attract users who cannot access legal sports gambling – which is restricted to the age of 21 or more in most states.