Canadian Lottery Coalition Pushes for Crackdown on Prediction Markets
The Canadian Lottery Coalition (CLC) is calling for even tighter controls on prediction markets after financial regulators said last week (Aug. 27) that sports event contracts should not be treated as securities. “We appreciate the further clarity, but I just feel like it’s too far to say that it’s…
The Canadian Lottery Coalition (CLC) is calling for even tighter controls on prediction markets after financial regulators said last week (Aug. 27) that sports event contracts should not be treated as securities. Financial regulators in Canada last week put controls on event contract trading around sports and entertainment like those found on U.S.-based prediction market platform like Polymarket. (Photo Illustration by Thomas Fuller/SOPA Images/LightRocket via Getty Images) “We appreciate the further clarity, but I just feel like it’s too far to say that it’s a line in the sand,” said Molly Cormier, executive director of the CLC, to the Globe and Mail. “The time to act is now before they expand further in Canada.” Coalition Calls for Action According to the Globe story, CLC has registered to lobby provincial officials on the issue. CLC is an alliance of provincial lottery corporations, including Atlantic Lottery, Loto-Québec, Manitoba Liquor and Lotteries, and British Columbia Lottery Corporation. In March, the Canadian Investment Regulatory Organization (CIRO) announced it would allow investment management service Wealthsimple to set up prediction market trading for event contracts around financial markets, economic indicators and climate. Regulators Draw Legal Boundary CIRO is the national self-regulatory organization that governs investment dealers, mutual fund dealers and trading activity on Canadian debt and equity marketplaces. Interactive Brokers Canada Inc. is the only other CIRO investment dealer member granted approval to allow event contract trading. The Canadian Securities Administrators (CSA) and CIRO issued a joint notice on Aug. 27 rejecting the growing U.S. prediction market model, where companies like Polymarket and Novig offer sports event contracts nationwide under federal authority issued by the Commodity Futures Trading Commission (CFTC). Public Revenue Concerns Emerge “It is important for investors and market participants to understand that event contracts based on sports- and entertainment-related activities or outcomes should not be regulated within securities and derivatives legislation,” said Stan Magidson, CSA chair and chair and CEO of the Alberta Securities Commission. The CSA coordinates securities regulation across Canada’s provinces and territories. The CLC contends that prediction-market event contracts, which allow people to wager on future outcomes, are in fact gambling and should face tighter controls. According to the CLC, unlike revenue generated by Crown corporations, prediction-market revenue would not flow into government coffers to help fund healthcare, public education, amateur sports, nonprofit groups, and cultural and community programs. The post Canadian Lottery Coalition Pushes for Crackdown on Prediction Markets appeared first on Casino.org.