Global prediction markets, local presence

Winnipeg’s mayoral race has reached a new platform: illegal online betting.

Incumbent Scott Gillingham took the lead on U.S.-based Polymarket on Thursday afternoon. Some $15,335 had been invested in his win (from 54 per cent of bettors).

Gillingham also led on Kalshi, another U.S. prediction market. Half of bettors were banking on his victory (a ‘yes’ share was 60 cents at the time).

Kevin Klein trailed in second place in both Polymarket and Kalshi contracts; Mazher Alam had garnered $2,256 and third place on Polymarket; Don Woodstock claimed third place on Kalshi by 4:30 p.m. Thursday.

Prediction markets aren’t allowed to offer election, sports and entertainment contracts in Canada. Still, they are appearing online at a rapid rate.

The markets have grown in popularity, and controversy, in North America over the past couple years.

Participants bet on real-world events.

The Canadian Investment Regulatory Organization has approved two vendors’ platforms — one from Wealthsimple, a Canadian financial services firm, and one from Interactive Brokers Canada.

Event contracts in Canada are legally confined to financial, economic and climate indicators that won’t take place for at least 30 days.

“Polymarket is not authorized to offer event contracts in Canada and is not subject to Canadian regulatory oversight,” a spokesperson for the Canadian Investment Regulatory Organization wrote in a statement.

Shiu-Yik Au, a University of Manitoba finance professor, called predictive markets the “Wild West … You can bet on all of it.”

Polymarket requires Manitoba users to attest they’re not a U.S. resident and don’t live in a restricted jurisdiction when they agree to the company’s terms of use. People can then choose cryptocurrency or cash, to be converted into cryptocurrency, to bet on contracts.

Kalshi blocks Manitoba users, saying prediction markets aren’t available. (Its website is separate from a deal it has with Wealthsimple; it’s the Canadian company’s exchange partner.)

Canadians can hide their geographic location by changing their virtual private network, or VPN.

“You might get a geo-block notification, and in that case, then the operators are arguably doing what they’re supposed to,” said Matthew Burgoyne, a partner at Osler, Hoskin & Harcourt LLP in Alberta who’s handled prediction market cases.

“If a Winnipegger really wants to get on the platform and create a market for this contract, they probably can find a way. It’s … hard in practice to completely prevent someone from doing that.”

Kalshi bettors have stakes in today’s Winnipeg Blue Bombers-Toronto Argonauts CFL game. Meanwhile, Manitoba leads the way in the contract “Which Canadian provinces will call a snap election before 2028?”

Christopher Adams, an adjunct professor in political science at the University of Manitoba, says he plans to compare Polymarket with polling results following the 2026 provincial elections in Quebec and British Columbia.

He’s heard claims Polymarket is a better predictor of elections in the U.S. Bettors have “skin in the game,” he said.

“The people are engaged when they’re betting,” he added, noting predictions markets don’t have detailed breakdowns of user demographics, unlike polls.

This doesn’t help with political parties’ strategies, Adams said.

Involving predictions markets in elections could raise “all sorts of ugliness,” Au warned.

For example, elections officers placing bets may try and alter election results if enough money is there. They may make trades ahead of result announcements, Au said.

“We have very weak ways of … cracking down on that kind of corrupt behaviour,” he added.

A U.S. soldier made headlines earlier this year for using classified information to bet on the capture of Venezuelan president Nicolas Maduro. They netted at least US$400,000 on Polymarket.

Ontario has banned Polymarket’s founding company through a settlement agreement with the Ontario Securities Commission.

The Manitoba Securities Commission has limited resources, Au said: “To go after a place like Kalshi who (is) quite frankly not even in the province, I don’t think they can.

“It’s a question of whether it’s enforceable or unenforceable.”

The Manitoba Securities Commission didn’t respond to questions by end of day Thursday.

A Liquor, Gaming and Cannabis Authority of Manitoba spokesperson said the entity prohibits sport and entertainment event contracts traded on predictive markets; it considers them gambling under Canada’s Criminal Code.

(The Canadian Securities Administrators and the Canadian Investment Regulatory Organization issued a joint notice in August saying sports- and entertainment-based event contracts shouldn’t be regulated within securities and derivatives legislation.)

Au said stricter regulation of predictive markets in the United States may follow citizens’ finances being “wiped out.”

gabrielle.piche@winnipegfreepress.com