Are Prediction Markets Gambling?
Last updated: October 13, 2026. Reviewed quarterly.
Are prediction markets gambling in Canada? It depends on the contract and who offers it. Securities regulators authorize a narrow set of economic, financial, and climate contracts, and they have ruled sports and entertainment contracts out. British Columbia’s gambling regulator says sports contracts are gambling. No Canadian court has settled the question, as far as we found.
Below, we explain what Canadian law counts as gambling, where regulators have drawn lines, and why U.S. courts disagree.
What Does Canadian Law Count as Gambling?
The Criminal Code gives the starting point. Section 197 defines a “bet” as “a bet that is placed on any contingency or event that is to take place in or out of Canada.” It also defines a “game” as “a game of chance or mixed chance and skill.”
Two points follow from that wording:
- The definition is broad. A wager on any future event can qualify, and the sporting examples in the section are only illustrations.
- Skill does not take you outside it. A game of “mixed chance and skill” still counts.
That is confirmed law. However, applying it to prediction markets is our inference. A contract that pays $1 if a team wins looks like a bet on a contingency, but the Criminal Code does not mention event contracts, and we found no Canadian ruling on them.
Where Do Canadian Regulators Draw the Line?
On August 27, 2026, the CSA and CIRO issued Joint Staff Notice 91-307. CSA staff said sports and entertainment event contracts “should not be regulated within securities and derivatives legislation.” CIRO staff said they do not consider it appropriate to facilitate or approve dealer applications to trade them, according to McCarthy Tétrault’s summary.
The next day, British Columbia’s Independent Gambling Control Office spoke. As reported by Focus Gaming News, it said that products based on sports or entertainment outcomes are gambling under current provincial law, and that unregulated gambling is illegal in the province. We could not locate the office’s original statement, so treat the wording as secondhand. We also found no equivalent public statement from Ontario’s AGCO.
| Contract type | Who regulates it | Status in Canada |
|---|---|---|
| Economic, financial and climate event contracts | CIRO and the CSA, through authorized dealers | Permitted, with a 30-day minimum term and no leverage |
| Sports and entertainment | Not securities regulators | B.C. says gambling law applies. Other provinces unconfirmed |
| Other event types | Under review | Regulators say further guidance will follow |
Likewise, industry groups see the line the same way. The Canadian Gaming Association’s CEO, Paul Burns, said sports wagering should be offered only through provincial gaming regulators. He added that the distinction between a sports contract and a sports bet “should not be reduced to semantics,” according to Gambling Insider.
Does Skill Change Whether a Prediction Market Is a Bet?
First, supporters make a fair argument. A prediction market rewards research, and traders can exit before an event ends. Casino games, by contrast, depend almost entirely on chance.
However, Canadian law gives that argument limited help. The Criminal Code definition already covers mixed chance and skill. Even so, regulators have not applied it to every contract, since the authorized dealers offer economic and financial contracts under securities law instead.
So the practical answer to “are prediction markets gambling” turns less on skill and more on the underlying event. A contract on an inflation figure sits in the securities lane. A contract on a hockey game sits outside it. Our guide to prediction markets vs sports betting covers how the two products differ in structure and cost.
How Are U.S. Courts Treating Prediction Markets as Gambling?
American courts are split. In April 2026, the Third Circuit affirmed an injunction for Kalshi, holding that its sports contracts are swaps and that federal law preempts New Jersey’s gambling rules. One judge dissented.
On September 25, 2026, the Sixth Circuit went the other way. Deadspin reports that it held Kalshi had not shown its sports contracts are swaps. Alternatively, it held that federal law does not preempt Ohio’s and Tennessee’s gambling laws.
So two courts gave two answers. The split could reach the U.S. Supreme Court, though that is our inference. These rulings do not bind Canada. They do show that the question “are prediction markets gambling” remains open even in the country where Kalshi operates. Our Kalshi in Canada guide explains how its contracts reach Canadians.
What Does the Gambling Label Change for You?
The label decides who protects you. Licensed sportsbooks answer to a provincial regulator, and in Ontario that is the AGCO. Authorized dealers answer to CIRO, whose rules include the 30-day minimum and the ban on leverage. A platform with neither license offers neither set of protections.
Also, the label decides who may offer the product. Under current guidance, a securities dealer cannot list a sports contract in Canada. That is why the dealers’ menus look so different from offshore platforms.
Still, none of this changes the personal risk. Frequent, fast wagering can cause harm in any format. If it affects you, ConnexOntario offers free support at 1-866-531-2600. For the wider legal picture, see our guide on whether prediction markets are legal in Canada.
Where Does PredictX Fit in All This?
This debate explains why we publish the blog. PredictX Markets Inc. is a Canadian company that builds prediction market technology for licensed operators, rather than a consumer platform. We do not run a market you can trade on, and nothing in this article is a product offer.
Two design principles shape what we build:
- Peer-to-peer matching. Participants trade against each other, and the platform earns a commission on matched trades rather than profiting from losses.
- Operator-held funds. Player balances stay with the licensed operator. The technology layer calculates and settles; it does not custody anyone’s money.
We also write for readers who want straight answers, because platforms that are selling something rarely give them. Join The Briefing by PredictX for regulatory news without that bias.
Are Prediction Markets Gambling? Frequently Asked Questions
The basics
Are prediction markets gambling? It depends on the contract and the jurisdiction. Canadian law defines a bet broadly, and B.C. says sports contracts are gambling. Securities regulators treat a narrow set of economic and financial contracts as securities instead.
Is trading on a prediction market a bet? Possibly. The Criminal Code covers a bet “placed on any contingency or event,” and that wording could reach some event contracts. No Canadian court has ruled on this, so the point remains unsettled.
Does skill make it different from gambling? Not under the Criminal Code definition, which includes games of mixed chance and skill. Skill may matter in other ways, but it does not settle the legal label.
Canada and the rules
Are prediction markets gambling in Ontario? We found no public AGCO statement on this. CIRO authorizes certain economic and financial contracts for dealers, and it will not approve sports contracts.
Is Kalshi gambling? U.S. courts disagree. The Third Circuit sided with Kalshi in April 2026, and the Sixth Circuit ruled against it on September 25, 2026.
Can I trade sports contracts legally in Canada? Not through a Canadian securities dealer. B.C. says sports contracts are gambling that requires provincial authorization.
This article is educational and is not legal, tax, or investment advice. Confirm the current position with the regulator or a qualified professional before acting. If gambling or trading is causing you harm, call ConnexOntario at 1-866-531-2600 or visit connexontario.ca.
Want the full picture? Read the complete guide, Prediction Markets in Canada: Everything You Need to Know.
