The Canadian Lottery Coalition is urging provincial officials to tighten controls on prediction markets after Canadian securities regulators ruled on August 27, 2026, that contracts tied to sports and entertainment outcomes should not be regulated under securities and derivatives legislation.

The ruling closes one possible route for sports prediction contracts through investment dealers, but it does not decide whether the products are legal or licensed under provincial gaming rules.

A new regulatory boundary

The Canadian Securities Administrators and the Canadian Investment Regulatory Organization (CIRO) said sports and entertainment event contracts should not be handled through securities law.

CIRO also said it would not consider applications from dealer members seeking approval to facilitate those contracts.

The guidance does not authorize sports prediction markets in Canada. It removes one possible route through investment dealers and leaves the products subject to any other federal, provincial or territorial rules that may apply.

Canadian gaming regulation remains divided by jurisdiction. Provinces and territories control most gaming policy, while provincial lottery corporations and regulators operate or supervise different parts of the market.

Why lottery corporations are concerned

The coalition represents publicly owned gaming bodies including Atlantic Lottery, Loto-Québec, Manitoba Liquor and Lotteries, and the British Columbia Lottery Corporation.

It argues that prediction markets can resemble gambling when customers risk money on the outcome of a real-world event. The coalition says private platforms could capture spending that currently flows through provincially regulated sportsbooks and lottery systems.

Those systems return net proceeds to provincial governments or support public programs, although the arrangements differ by jurisdiction. The coalition says private prediction markets would not provide the same public return.

Pressure builds as products expand

The coalition registered to lobby provincial officials as prediction-market operators expand products linked to sports, entertainment, politics and other events in international markets.

Canadian regulators have allowed a narrower group of event contracts through authorized investment dealers. CIRO said in March 2026 that two dealer members could facilitate access to contracts tied to economic, environmental and financial indicators.

That access is subject to conditions including:

  • A minimum 30-day maturity.
  • No leverage.

Sports and entertainment contracts are outside that channel. Provinces must now determine whether to treat them as gambling, prohibit them, or create rules that distinguish them from ordinary sportsbook wagers.

What the ruling could mean

  • Investment dealers will not have the same approval route for sports and entertainment contracts.
  • Provincial authorities may need to clarify whether prediction markets require gaming registration or other permissions.
  • Operators could face different age, identity, geolocation, advertising, self-exclusion and anti-money-laundering requirements in each jurisdiction.
  • Players should not assume that a product outside securities regulation is licensed or legal in their province.

The Canadian Securities Administrators and CIRO said they will continue monitoring prediction markets. They may issue further guidance or impose additional restrictions.

The coalition's lobbying campaign shifts the next stage of the dispute from securities regulators to provincial gaming and public-policy officials. The outcome could affect market access, player protections and the flow of gaming revenue to public programs.