Betting On The Future: How Prediction Markets Are Changing Everything

Recently, the Canadian Investment Regulatory Organization (“CIRO”) approved Wealthsimple to offer forecast contracts. Forecast contracts are investment products that offer investors binary “yes” or “no” options, which are tied to future events. The CIRO approval — which is currently limited to contracts based on economic indicators, financial markets and climate trends — indicates the broader prevalence of prediction markets, an increasingly popular form of event-based wagering.

Prediction markets are online, open-market trading platforms, which have seen a massive spike in usage over the past year. The platforms, which allow users to trade bets in areas such as sports, politics and pop culture events, enable a unique form of gambling that poses new issues from a regulatory perspective. Though Canada has yet to offer broad permission for prediction markets, the Wealthsimple approval may indicate a willingness to do so.