Canada's Prediction Markets Stoke Insider Trading Fears
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- Wealthsimple launched prediction markets allowing users to bet on corporate metrics including Dollarama's comparable store sales, Loblaw's quarterly results, Air Canada's passenger load factor, and Shopify's gross merchandise volume, with wagering brackets offered on ranges like "above 2.5 per cent" growth or decline.
- Securities lawyers Gregory Hogan of Cassels Brock and Adam Garetson of Gowling WLG warn Canada's insider-trading laws were designed for a "different world" and "don't map neatly onto event-based contracts," creating a legal grey zone around event-contract betting.
- Toronto fintech lawyer Evan Thomas said provincial securities regulators could still pursue insider-trading cases on prediction markets using their broad "public-interest power" even where traditional insider-trading provisions don't technically apply.
- A Google software engineer was accused in May of profiting over US$1.2-million by trading on confidential business information on Polymarket, and a U.S. soldier was charged with using classified intelligence to earn more than US$400,000 betting on the capture of Nicolás Maduro in Venezuela.
- Royal Bank of Canada has barred employees with access to material non-public information from betting on prediction markets via an employee bulletin, while Bank of Nova Scotia's personal trading policy prohibits employees from trading on prediction-market platforms to speculate on financial markets, indexes, or companies.
- Wealthsimple says three layers of surveillance prevent insider trading on its platform: anti-money-laundering client verification, a futures commission merchant that monitors trading patterns and routes orders to Kalshi, and Kalshi's own real-time market monitoring and regulatory reporting.
- Canadian Tire's actual Q2 comparable store sales came in at 0.7% — a figure that fell between the prediction-market brackets offered on Wealthsimple Predict (which jumped from "above 2.5%" growth to "above a 2.5% decline" with no middle tier).
Why it matters: Seven major Canadian public companies — Dollarama, Loblaw, Air Canada, Shopify, Lululemon, Canadian Tire, and Royal Bank — are already featured as bet targets, turning every quarterly disclosure into a potential insider trading opportunity. Canadian banks have moved preemptively: RBC and Scotiabank have implemented outright bans on prediction-market betting for employees with material non-public information access, and the Canadian Securities Administrators have confirmed event-contract trading is subject to insider-trading prohibitions.
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