Have a really good feeling that April will have a snow day? Soon you may be able to bet on that hunch.
What happened: According to a Globe and Mail report (from Peak alum Meera Raman!), Wealthsimple has cleared the regulatory hurdles to start offering prediction markets in Canada, the first step in offering the controversial trading product to its ~3 million retail investors.
Prediction markets have been limited in Canada since 2017, although many people simply use VPNs to access platforms based abroad. Ontario banned Polymarket altogether in a crackdown on prediction markets last year.
Wealthsimple would be the first retail investor platform to offer prediction markets in Canada, though it reportedly did not receive regulatory approval to offer contracts on sports or elections (two of the most popular markets in the U.S.).
Catch-up: Prediction market trading volume exploded last year to reach ~US$64 billion, up over 400% from 2024. That popularity has come with its share of scrutiny, with countless instances of suspected insider trading. While it's illegal in the stock market, trading with inside knowledge has been openly encouraged by Polymarket’s founder.
One trader has made almost US$1 million from dozens of suspiciously well-timed Polymarket bets that correctly predicted military strikes in Iran.
In another high-profile example, an anonymous Polymarket account conveniently placed a large wager that the U.S. would capture Venezuelan President Nicolas Maduro just hours before he was ousted, pocketing over $400,000 on the bet.
Why it matters: The U.S. has been exhibit A for the fraud that prediction markets can breed without proper oversight. If this type of trading is indeed here to stay, the pressure will be on Canadian regulators to not replicate the mistakes of their southern neighbour.—LA
