Wealthsimple gets regulator's nod for forecast trading, sparking debate over "gambling" on economic events

It’s not the first online trading platform to venture into forecast contract trading. In April 2025, Interactive Brokers Canada became the first CIRO-regulated dealer to officially launch Forecast Contracts in Canada (2). While Wealthsimple isn’t breaking new ground, its announcement that it may be pursuing forecast contract trading landed with quite a big thud.

"Wealthsimple is a great financial platform without prediction trading. But I guess the gamblers will like it!?" — bwana4, March 27, 2026 (3)

What is prediction trading, exactly?

Prediction markets let users place yes-or-no bets on whether a specific event will occur. For example, a user can bet on whether the Bank of Canada will cut interest rates at its next meeting, or whether inflation will hit a particular threshold. Users typically buy contracts that pay out a fixed amount if they are right, and nothing if they are wrong.

The sector has exploded internationally, driven largely by U.S.-based platforms such as Kalshi and Polymarket, and has become especially popular among younger users. On the surface, it can look like an informed, data-driven form of investing. In practice, it more closely resembles sports betting — with similar psychological hooks and loss patterns.

Werner Antweiler, a UBC Sauder School of Business associate professor who ran a not-for-profit prediction market at UBC for over two decades, put it plainly in a recent article (4): "In practice, commercial prediction markets resemble gambling. When a market is based on a simple win-or-lose outcome, it's essentially a bet."

Why Canada tried to keep prediction markets out

The concerns of Antweiler and other critics of forecast trading are not without precedent. In 2017, the Canadian Securities Administrators (CSA), the umbrella organization of provincial securities regulators, banned short-term yes-or-no contracts, classifying them as "binary options" — a product already associated with widespread fraud and consumer harm (5).

The concern was straightforward: These products are structurally designed to look like financial instruments while functioning more like gambling bets. They offer no ownership of underlying assets, no dividends and no long-term wealth-building mechanics. The payout is binary — win everything or lose everything on a single outcome.

In 2025, Ontario's securities regulator finalized a settlement with Blockratize Inc. and Adventure One QSS Inc. (Polymarket's operators), that included a two-year ban and a $200,000 fine (and disgorgement and administrative repayments in excess of $40,000) for offering markets to customers in Ontario from June 2020 through May 2023 (6). Despite the ban, some Canadians had continued to access these platforms using virtual private networks (VPNs).

"These are all-or-nothing bets and whenever large amounts of money are involved, and big losers, families can be ruined. Isn't it 'unrighteous' to bet on something to fail? We saw that in the Subprime Mortgage Crisis of 2008. When investment bankers should have been warning mortgage holders, they were betting on them to lose their homes instead." — Leah & Todd Sonne, March 28, 2026 (7)

The insider trading concern Canadians shouldn't ignore

The risks with prediction markets go beyond simple loss. In America, regulators and lawmakers are actively debating whether these products enable insider trading on a scale that undermines market integrity.

An anonymous trader cashed out over US$430K on an approximate bet of US$32,000 that Venezuelan President Nicolás Maduro would be ousted by the end of January — shortly before a U.S. military operation did so — prompting serious questions about whether that position was placed using non-public information (8).

Then, in the same week Wealthsimple's approval was confirmed, a pair of U.S. senators introduced legislation called the Prediction Markets Are Gambling Act, which would bar prediction markets from offering contracts tied to sporting events.

And the concern is real. When prediction market payouts hinge on geopolitical developments or policy decisions, the potential for those with privileged access to exploit everyday retail investors is real and documented (9).

What Wealthsimple's approval does and doesn't allow

Wealthsimple's approval permits the company to offer contracts tied only to economic indicators, financial markets and climate trends — not sports or elections, which are among the most popular prediction market categories in the U.S.

While this allows for trading through a narrower scope, it does not reduce the core risk: That ordinary Canadians, many of them new or casual investors, will engage with a binary-outcome, loss-prone product through a platform they already trust for their TFSA or RRSP contributions.

Jean-Paul Bureaud, executive director of FAIR Canada, a national investor advocacy organization, warned that this move could open the door to a "dangerous slippery slope" as firms will "inevitably" try to push the envelope further. "Ultimately, it blurs the line between investing and gambling," he said. "Prediction markets are shorter-term bets. Putting gambling-style products on investing platforms risks real harm to people who think they're investing, not gambling. (10)"

There’s even a warning from CIRO spokesperson Joanna Nicholson, who noted that investors in forecast contracts must be particularly careful, because companies that offer them are not required to assess whether the products meet individual clients' investment goals and risk tolerance (11).

For at least one Wealthsimple user already dealing with a platform dispute, the announcement felt like the wrong move at the wrong time:

"Considering they don't have any procedures to help customers when customers accidentally send $800 to the wrong person — with no way of getting it back and simply telling them they can't do anything about it — this is a really bad idea." — Jonas soulier, March 28, 2026 (12)

The sentiment from Soulier and other Canadian commenters can’t be ignored: Trust is hard to build and easy to lose.

Money.ca reached out to Wealthsimple for a comment when the CIRO approval was first announced, but didn’t get an official response.

What should investors do?

To be blunt: Prediction trading contracts are not a substitute for investing. Forecast trading carries no ownership stake, offers no compounding returns and resolves as an all-or-nothing payout. Before engaging with this product through any platform, Canadian investors should consider the following:

Treat it like a casino budget, not a portfolio allocation. Any capital you put into prediction markets should be money you can afford to lose entirely — not savings earmarked for retirement or a down payment.