We have a not-so-bold prediction: Canada will soon see more prediction market platforms.
Driving the news: A new prediction market called Verdx is seeking regulatory approval to enter the Canadian market, per the Globe and Mail. Founded by a group of former finance industry execs, the platform would be classified as an investment dealer, targeting both retail and institutional investors.
Unlike the prediction market Wealthsimple launched earlier this year, Verdx will be a standalone product focused on event contracts rather than one offering that’s part of a larger company.
Why it matters: Co-founder Atul Tiwari laid out the case for Canadian prediction market platforms in a Globe op-ed earlier this year, arguing they would provide valuable hedging mechanisms for investors and that regulated options would stifle grey market participation.
Tiwari used Ontario’s iGaming system as a comparison, noting that participation with licensed gambling operators increased from 30% to 84% over three to four years after it launched.
Yes, but: Under Canadian Investment Regulatory Organization rules, prediction market operators can only offer wagers on economic indicators, financial markets, and climate trends. Which is to say, none of the fun stuff like sporting events or political elections.
Our take: The iGaming comparison doesn’t really work as, without these offerings, it will be hard to attract the existing base of Canadian prediction market users, who are already comfortable using VPNs to access platforms like Kalshi. However, attracting institutional investors who need to keep things aboveboard does feel like a real potential market.—QH
