Prediction markets are coming to Canada – and young investors are already betting on them

Jake Chung knows the rules of building wealth. They spill out of the 21-year-old’s mouth as if he was born with the knowledge: Start early, stay invested and let compound growth do the heavy lifting.

The undergraduate student studying finance in Bellevue, Wash., knows that, over time, the stock market can return about 10 per cent a year. He just doesn’t find the wait very compelling.

“I thought there had to be a way to make 10 per cent a day.”

He went looking and found his answer in prediction markets: online platforms where users can trade on, well, anything.

Will U.S. President Donald Trump say “freedom” in his speech today? Will 2026 be the hottest year on record? Will Justin Trudeau and Katy Perry get engaged by the end of the summer? Users can place trades on those yes-or-no outcomes and win money.

When Mr. Chung started, he set himself a challenge: Turn $100 into $1,000. It took less than a month and 25 trades, one trade a day – a 900-per-cent increase.

“There was a lot more risk to it,” he said, compared with letting wealth grow over time. Nonetheless, he was hooked. “I would definitely do that rather than wait for 10 per cent annually.”

While Mr. Chung lives in the United States, where prediction market trading is widely available, Canadians have been wanting a piece of the action, too. The problem? It’s been largely off-limits, until recently.

Online brokerages and fintech firms, such as Wealthsimple and Interactive Brokers Canada, are pushing to bring prediction trading to Canadian investors, saying the products can offer new ways to hedge financial risks.

The appeal for Canadian companies is obvious: The prediction markets industry has expanded rapidly, generating roughly US$2-billion in annual revenue and estimated to surpass US$10-billion by 2030, analysts at Citizens Financial Group Inc. said in late 2025.

But this popularity has also drawn scrutiny, with American lawmakers and regulators debating whether these products that have been recognized as financial instruments more closely resemble unregulated gambling.

In Canada, demand is building quickly. Investors north of the border have been accessing U.S.-based prediction market platforms such as Polymarket and Kalshi through virtual private networks, or VPNs, that disguise their location. At the same time, waves of young do-it-yourself investors have moved from meme stocks to cryptocurrency and now prediction markets, chasing faster gains in an economy where traditional paths to wealth feel increasingly out of reach.

The result is a tricky balancing act for Canadian regulators, which must now determine how to safely introduce a fast-growing financial product at a moment when many younger investors are already embracing riskier forms of trading.

The expansion of prediction markets in Canada feels inevitable. The question is: Are we ready?

At a cozy venue in west-end Toronto in early April, nearly 100 people squeezed into rows of chairs until they filled up, leaving an overflow crowd standing shoulder-to-shoulder at the back of the room. The audience, mostly younger men, shared a common interest in prediction markets.

Walking into the event, you’d be hard-pressed to guess that only two companies in Canada have regulatory approval to offer prediction trades. At the front stood a man wearing a bright blue Polymarket hoodie. A big flag promoting the platform was draped over the bar beside him.

Simon Stern doesn’t work for the company, which was banned in Ontario in 2025 after it operated in the province for several years without authorization. He’s just a fan.

Mr. Stern, who works in developer relations at a Toronto tech company, wanted to seek out a community of people as fascinated as he was by prediction markets. And they weren’t hard to find.

The free event was open to anyone through an online invitation and featured different speakers talking about the uses of prediction markets.

“I’m very plugged in to the Canadian tech scene, and I can tell you, there are very few people who actively don’t want prediction markets,” Mr. Stern said in an interview.

While there is limited public data on how many Canadians use prediction market platforms, Mr. Stern’s event is just one example of the excitement building in the Canadian market.

So, how do they work? Prediction markets let users wager on whether something will (or will not) happen by a certain date.

Unlike with traditional betting, users can typically buy and sell contracts as new information emerges, adjusting their positions in real time. They are not betting against a “house,” like in gambling, but against other users.

Until recently, Canadian regulators have kept this type of trading at arm’s length.

A 2017 ruling from Canada’s securities regulators banned the sale of short-term, yes-or-no contracts known as binary options. At the time, the contracts that were being offered were largely fraudulent, with no trading actually occurring, and investors had their money stolen.

Douglas Sarro, a University of Ottawa professor who specializes in securities regulation, said the ruling wasn’t designed with modern prediction markets in mind, but most prediction-style contracts still fall under that ban.

As the new industry gains popularity, though, regulators are cautiously opening the door.

Online financial services platform Wealthsimple recently received regulatory approval to offer what are known as forecast contracts. It’s the second firm to do so after Interactive Brokers Canada, which typically serves self-directed and institutional investors, received approval in 2025.

But that approval comes with strict limitations. Companies can offer contracts tied to economic indicators, financial markets and climate trends – but not sports or elections, which are among the most popular uses of prediction markets in the United States. The approval also stipulates that only event contracts with a term to maturity of 30 days or longer can be offered.

A controlled regulatory environment could offer Canadians a safer, legal way to participate in a market many are already accessing anyway, said Matthew Burgoyne, a partner at Osler, Hoskin & Harcourt LLP in Calgary and a chair of the firm’s digital assets and blockchain practice.

“We view ourselves as Canada’s leading financial innovator, and so our job is to bring the products that our clients want and do it in a way that is consistent with the regulatory framework, and provide a safe and trusted way for Canadians to access those products,” Michael Katchen, Wealthsimple’s chief executive officer, said at a Toronto event hosted by The Globe and Mail in early April.

For companies jockeying to offer these products, the appetite is evident.

Interactive Brokers’ Canadian clients traded 700,000 forecast contracts in the first 10 months after the product was introduced in April, 2025, the company said.

A late-2025 poll by Questrade Financial Group Inc., one of Canada’s first online trading platforms for retail investors, found that more than 70 per cent of its clients were interested in prediction trading. It polled a random sample of more than 2,500 clients. Questrade told The Globe that it has applied for regulatory approval for prediction trading and plans to start offering it later this summer.

Jean-François Bernier, managing director of Interactive Brokers Canada, said prediction contracts can be used to hedge against economic risks that are otherwise difficult to manage.

While the contracts that approved Canadian companies can offer are strict, Mr. Bernier says he believes they could “evolve with time as the markets grow.”

Earlier this year, Mr. Chung, the 21-year-old student, placed a trade on whether the word “Jordan” would be mentioned in a sports broadcast. It was, and he made more than $300 in seconds.

Betting on whether a person will say a certain word during a certain period of time is often called “mention trading.”

It’s how Mr. Chung wins big, and he’s methodical about it. He feeds transcripts from thousands of sports broadcasts into an AI model he built to predict whether certain words will be said during a future broadcast.

Not only does it rake in a good chunk of money, but it’s also fun, he said. But the discipline that goes into Mr. Chung’s bets is rare. Not everyone wins. Most people lose.

A working paper published in early April by French and Canadian researchers analyzed trades on Polymarket and found that about 71 per cent of users lose money, while a small group of skilled traders reap more than 80 per cent of all gains.

“Unless you’re very lucky or extremely good at forecasting, your expectation of making money is zero,” said Charles Martineau, an author of the paper and an associate professor of finance at the University of Toronto.

Nevin Burmeister opened a Kalshi account just a couple of days after his 18th birthday last July.

The Andersonville, Ind., resident used his savings to start trading. His first couple of trades were on the Rotten Tomatoes score of movies such as Happy Gilmore 2 and the latest Fantastic Four movie. Then, he almost exclusively started trading on sports.

Initially, his trades were successful, he said. “I really thought it was a pretty nice way to make a little bit of money – at first.”

But it didn’t last long. Over the course of six months, he lost more than $2,000, he said.

“Once I got my first couple losses, instead of stopping and being responsible, I would chase them,” he said. “I wanted my money back.”

He doesn’t use Kalshi as much these days. “I can’t really afford to do it any more,” he said. Mr. Burmeister recently lost his job working at a bankruptcy firm and is actively looking for new work.

If he could go back to last summer, he said he would tell himself, “you are gambling,” and to not get involved with prediction trading. “I would also say: Know your limits.”

Shannon Lee Simmons, a certified financial planner and founder of the New School of Finance in Toronto, sees the appeal of prediction trading as part of a deeper shift.

She said a big reason Canadians may be drawn to this type of trading is a sense of “financial nihilism.”

It’s the belief that conventional ways of building wealth – saving steadily, buying a home, landing a well-paying job – are increasingly out of reach. The mindset can lead people to favour near-term consumption or high-risk investments, such as meme stocks and cryptocurrencies, over long-term financial planning, she said.

The thinking is: “If I bet $2,000 and I lose the whole thing, fine, because what am I going to do with it anyways? It’s not going to change, it’s not going to buy me a house, it’s not going to save my retirement, but it could make me $10,000,” Ms. Simmons said.

While people of all ages are susceptible to this way of thinking, this attitude is especially pronounced among younger people, said Ms. Simmons, who often works with Gen Z and millennial clients. “You have this heightened appetite for risk that I think is unprecedented with younger Canadians.”

A 2022 survey from the British Columbia Securities Commission found that investors under 25 are more likely than older cohorts to believe it is possible to time the market. It polled about 3,700 Canadians aged 18 and over.

People under 25 also trade more frequently, often at least once a week, sometimes in an effort to win back losses or maintain excitement.

Ms. Simmons said the ease of accessing prediction market platforms through smartphones adds to the potential uptake. It allows an entire generation, she said, to trade “from the palm of their hand while they’re watching a show.”

Outside the Rogers Centre in Toronto on a Saturday afternoon in late March, people handed out free doughnuts to Toronto Blue Jays fans, along with flyers.

The leaflets offered a free $20 with the use of a promotional code, and encouraged game-goers to scan a QR code to “place a trade on today’s game.” They were promoting Polymarket, even though the platform, and its advertising, are banned in the province. The link directed users to download the Polymarket app, even though the app is not available in Canada.

“While we cannot discuss what we do with the information we are provided, it is taken very seriously by the Commission,” a spokesperson for the Ontario Securities Commission, Debra Chan, said at the time in response to the Polymarket flyers. Regulators also issued a notice in early April that said due to concerns around prediction markets, they would consider tighter rules.

When it comes to how regulations will be enforced in Canada, and what the penalty will be for breaking the rules, “there’s a lot of unknowns,” said Andrew Gray, a partner at law firm Torys LLP who specializes in securities litigation. He said securities regulations are often reactive, evolving in response to new products and risks as they emerge.

While a single federal regulator oversees prediction markets in the United States, Canada’s regulatory landscape is much more fragmented. The rules for a newer industry like prediction trading could vary by jurisdiction.

The Canadian Securities Administrators acts as an umbrella organization for provincial and territorial regulators, alongside the Canadian Investment Regulatory Organization, the national self-regulatory body for investment dealers and trading activity. But each province and territory ultimately has authority over which firms can operate in its jurisdiction.

“Our statutes, as they’re designed now, have a lack of clarity,” said Mr. Sarro, the professor who specializes in securities regulation.

He said the public has little insight into how regulators decide which products should be allowed and where boundaries between financial instruments and gambling should be drawn. “By blurring this boundary between investing and gambling, we are encouraging more people to engage in riskier trading.”

Werner Antweiler, an associate professor at the UBC Sauder School of Business, ran a not-for-profit prediction market for more than two decades. He said many retail investors are drawn to these platforms for the wrong reasons.

“The people from the retail side that participate in prediction markets are very much looking for gambling in disguise,” he said. While the newly approved platforms in Canada come with tighter restrictions, focusing on trades forecasting outcomes that are harder to manipulate, Mr. Antweiler warned there could be a “slippery slope.”

In the U.S., while prediction trades are considered financial instruments, lawmakers are debating whether they should be classified as gambling products instead.

In March, a pair of U.S. senators introduced legislation called the Prediction Markets Are Gambling Act, which would bar prediction markets such as Kalshi and Polymarket from offering contracts tied to sporting events.

Liberal MP and former minister Karina Gould, who chairs the House of Commons finance committee, said in an e-mailed statement that she believes prediction markets should fall under Canadian gambling rules and regulations.

“These betting products should be regulated by provincial gambling regulators to protect consumers,” she said. She stipulated she was not speaking on behalf of the government. The Department of Finance did not comment on prediction markets, saying they fall under the jurisdiction of individual provinces and territories.

Critics also point to risks such as insider trading. In one widely cited example, a U.S. special forces officer involved in the military operation to capture Venezuelan President Nicolás Maduro was charged with using classified information about the mission to win more than US$400,000 on Polymarket. There are concerns about a lack of oversight for lower-profile incidents.

As with many things in the world of finance, prediction markets create clear winners and losers. But while most traders lose money, and some cheat, the wagers tap into something palpable that keeps people coming back: The possibility – however slim – of outsmarting everyone else.

That’s what’s become so tantalizing for a new generation of Canadian investors, and it’s what keeps people like Mr. Chung tapped in.

“There is a competitive feel to it, because you’re not playing against a house,” said Mr. Chung. “You’re playing against other people. You’re trying to weed out other people, because if one person wins, another person is, unfortunately, losing.”

The Decibel: Prediction trading is coming to Canada

Prediction trading is exploding in popularity, with the industry set to rake in about US$2-billion in revenue this year alone. Companies such as Kalshi and Polymarket have popularized the practice, which lets you bet on nearly anything – from Taylor Swift’s marriage status to election outcomes. The Globe’s retirement and financial planning reporter Meera Raman joins the podcast to explain what the market may look like in Canada and the challenges regulators face in protecting investors.