People Mentioned
Partner, Corporate, Calgary
Prediction betting markets have seen explosive growth in the last couple of years, with monthly trading volume going from around US$100 million in early 2024 to more than US$13 billion at the end of last year. Offering binary wagers (like “yes/no” or “over/under”), popular platforms like Polymarket and Kalshi are partnering with sports leagues and news broadcasters and are being integrated into crypto wallets and major financial exchanges. Though binary wagers are currently banned in Canada, some observers are speculating about the prospect of prediction markets eventually coming north of the border.
Matthew Burgoyne, Chair of Osler’s Digital Assets and Blockchain practice, explained to Casino.org how Canada’s securities regulatory regime might apply to these kinds of platforms and activities.
“In December, 2017, Canadian securities regulators published Multilateral Instrument 91-102 Prohibition of Binary Options (MI 91-102),” Matthew writes. “MI 91-102 defines a binary option as a yes/no contract where payout is a fixed amount if a pre‑set condition is met and zero (or another fixed amount) if it is not, based on an underlying asset or event.
“Since most centralized crypto prediction markets provide for yes/no, fixed-payout event bets, they look and function like crypto-settled binary options, so offering them to retail Canadians may be captured by MI 91‑102’s binary options prohibition. While there is an exemption for contracts with a term of 30 days or more, it likely would not cover typical crypto prediction markets, which generally list short‑dated political and event contracts ranging from hours to a few weeks.”
Last spring, the Ontario Securities Commission reached a settlement with the companies behind Polymarket, which included more than $200,000 in penalties and a two-year ban from the province’s capital markets for contravening MI 91-102 and offering their product to Ontarians between 2020 and 2023.
“Realistically, the path to market in Canada for a large centralized crypto prediction market would almost certainly involve the company applying to provincial securities regulators for an exemption from MI 91-102,” Matthew writes.
“Canadian securities regulators are expressly empowered under the Instrument to grant exemptions subject to conditions and restrictions as may be imposed in the exemption.”
You can read the full article, “Will prediction markets ever become legal in Canada?”, on Casino.org.
People Mentioned
Partner, Corporate, Calgary
