Wealthsimple has received the regulatory green light to one day offer prediction markets trading, a fast-growing category that lets users bet on the outcome of real-world events that has so far been heavily restricted in Canada.

Wealthsimple spokesperson Juanita Leon confirmed the Canadian Investment Regulatory Organization (CIRO) has approved the Toronto fintech to offer what it calls “forecast contracts.” Wealthsimple only has permission to let users bet on economic indicators, financial markets and climate trends. Betting on sports or elections—which are among the most popular categories for U.S. prediction markets like Polymarket and Kalshi—will not be allowed. The Globe and Mail first reported the news.

Tech lawyer Jonathan Ip said the approval could pave the way for broader adoption of prediction markets in Canada. “This is allowing for something that’s in some ways inevitable,” he said. “The market is there, so why not provide it in a regulated manner?”

Prediction markets heat up: Prediction markets rose to prominence during the 2024 U.S. presidential election, when users placed more than US$3 billion in bets on the outcome. Between 2024 and 2025, trading volume on prediction markets almost quadrupled, growing from US$15.8 billion to US$63.5 billion, according to a report from blockchain security firm CertiK. U.S. stock trading app Robinhood—which is planning to enter Canada once its acquisition of Toronto crypto firm WonderFi closes—already offers prediction market trading. Leon declined to comment on the business reasons behind the move and declined to say when or if Wealthsimple plans to offer the service.

A tight leash: U.S. prediction markets have come under fire from regulators and lawmakers, who argue that insider trading controls aren’t strict enough, and that sports betting contracts resemble gambling more than securities trading. In Canada, the sector is even more tightly controlled. Securities regulators banned binary options—contracts where investors bet on the performance of an underlying asset within a period of time—in 2017, citing high risk of loss and fraud. Last year, as part of a settlement with the Ontario Securities Commission, Polymarket admitted that some of the contracts it offered to Ontario residents from 2020 to 2023 were binary options and agreed to bar Ontario residents from its platform. Competitors Kalshi and Opinion also warn that their platforms are restricted in Canada and Ontario, respectively. Ip noted, however, that Canadians are likely still accessing them using VPNs.

In an email, CIRO spokesperson Joanna Nicholson declined to comment on the Wealthsimple approval, but said investors in forecast contracts must be particularly careful because companies that offer them don’t have to assess whether they meet clients’ investment goals and risk tolerance. Ilana Kelemen, a spokesperson for the Canadian Securities Administrators, an umbrella organization for provincial securities watchdogs, said regulators are monitoring prediction markets and will consider whether further enforcement is necessary.

Page from an old playbook: Wealthsimple’s approval to offer a limited range of prediction contracts mirrors the approach it took when launching crypto trading, a significant expansion beyond the wealth management products it’s best known for. In 2020, Wealthsimple became the first company to get permission from Canadian securities regulators to let users buy crypto, while hundreds of its competitors continued to operate in a regulatory grey area. 

In a 2021 interview with The Logic, Wealthsimple CEO Michael Katchen expressed frustration that investors who wanted to buy a broader range of crypto assets at higher dollar amounts than the company was allowed to offer were effectively forced to use unregulated competitors. A week later, regulators announced a crackdown on the sector, telling crypto platforms to either register as securities dealers or exit the country. Leon declined to comment when asked if Wealthsimple sees parallels between its crypto and predictions markets strategies, and whether the company would like regulators to take stronger action against unregistered international competitors in prediction markets.

The house always wins: Ip said regulators likely restricted Wealthsimple from offering sports betting in order to avoid stepping into territory covered by gambling watchdogs. “It can look quite similar,” he said, adding that one major difference between gambling and prediction markets is who the users are betting against. In gambling, players bet against the house; in prediction markets, they bet against each other.

Most major prediction platforms, including Polymarket and Kalshi, are crypto-based, with software distributing the winnings automatically. Robinhood sometimes uses Kalshi, which is federally regulated in the U.S., as a marketplace for matching prediction market traders. Interactive Brokers, the only other company approved to offer forecasting contracts in Canada, uses the U.S. exchange ForecastEx. Leon declined to comment on how Wealthsimple would match and settle trades if it launched prediction markets.