People Mentioned
Partner, Corporate, Calgary
An online prediction market, Polymarket, grants users a platform in which bets can be placed on real world events. Since its launch in 2020, Canadians have actively used Polymarket to place bets on Canadian events. As is often the case with rapidly evolving technology, a federal regulatory response in Canada to establish clear guidelines for online prediction markets has been lagging.
Ontario is the only province to have taken definitive action with respect to the nontraditional online prediction market, and that is to ban trading on the platform altogether. Offering binary options to retail investors is prohibited in the province, and the ban of trading on Polymarket was ultimately enforced as Polymarket’s binary options violate Ontario securities law. “[Outcomes are] very black and white,” said Osler’s Matthew Burgoyne, Chair of the Digital Assets and Blockchain practice. “Either you win or you lose.”
“It’s illegal to … sell or trade binary options shorter than 30 days with any individual in Canada,” Matthew tells Canadian Affairs. “These prediction markets like Polymarket really do seem to fit that definition of a binary option, because there’s typically a short time period, and there’s a binary outcome.”
The Canadian Securities Administrators held that unregulated access to binary options posed a high risk of fraud to Canadian investors. Matthew believes that there is merit to fraud concerns. “In Canada, investors are subject to fraud constantly,” he said. “And binary options have been a very popular way for fraudsters to defraud Canadian investors, very specifically.” Matthew adds that even on markets with relatively high levels of corporate legitimacy, questions of investor protection, fairness and transparency remain.
A crypto consultant believes that prohibiting prediction markets rather than establishing a comprehensive regulatory framework to keep up with such advancements is doing a disservice to Canadians.
Read the full article by Samuel Forster, “Should prediction markets be legal in Canada?” on the Canadian Affairs website.
People Mentioned
Partner, Corporate, Calgary
