In 2017, Canada’s regulators judged a certain kind of bet too dangerous to sell to ordinary people. This summer, with the blessing of those same regulators, a version of that bet will be pitched to four million ordinary Canadians.
Previously known as a binary option, the bet is now called an event contract — but the basic structure and payout are the same: a yes-or-no wager, costing less than a dollar, based on the outcome of some price or event. Guess right and you collect a fixed payout. Guess wrong and you lose your whole stake.
Almost 10 years ago, confronted with a record of fraud and retail losses, the Canadian Securities Administrators (CSA) placed an outright ban on binary options with a term of 29 days or less.
On June 18, Wealthsimple announced Wealthsimple Predict, a standalone app for trading some 4,000 event contracts from the U.S. platform Kalshi. The app is in beta now, with the full launch set for later this summer.
Strip away the packaging and it is the same bet the regulators banned as a danger to the public in 2017. This time the product comes better dressed: a 30-day minimum term, a licensed dealer, no leverage, approved categories. Real enough, every one — but beneath them lies the same long-odds bet.
The only substantive difference is a one-day-longer term: at 29 it is illegal, at 30 a regulated product.
Granted, the regulator did not simply rubber-stamp this. The Canadian Investment Regulatory Organization (CIRO) intends to oversee these contracts much as it oversees stock options. But supervising a bet like an investment does not make it one. The guardrails — the licensing, the oversight, the approved categories — dress a wager in investment clothing; they do not change its poor payout odds.
How poor? The few studies that track real outcomes all converge: most people lose. The clearest picture comes from Polymarket, the one market whose every trade can be counted. The biggest study found roughly seven in 10 users lose money, with the top 1% of winners accounting for more than three-quarters of the gains.
That 1% are not lucky amateurs, but a sophisticated few who set the prices everyone else trades against and buy up their mistakes. It is true that Polymarket runs racier bets than Wealthsimple will, and no one yet knows how the narrower Canadian product will behave. But gambling odds never change. A few win. The rest pay. The platform takes its cut.
Who, then, is allowed to lose their money? Almost anyone.
Wealthsimple will check only two things: whether you have a job and what you earn. A student without a job is turned away; an employed adult walks straight in, no matter if they understand the bet they’re about to make.
What this screen measures is whether you can afford to lose your money — not whether you understand how likely you are to lose it. Charles Martineau, who co-authored the Polymarket study, is blunt: almost no one should expect to come out ahead.
A weak screen would matter less if the firm wanted it to hold. By its own account, it does not. Wealthsimple says its job is to inform, not restrict. Its clients are “very good risk managers on their own.” It likens taking the product away to “de-banking,” a protection recast as a deprivation.
The only rules it must follow were written for stock options, not for a bet like this. The regulator drew a thin line; the firm eagerly shepherds people across it.
An argument can be made that Canadians already reach these markets offshore — better then to bring them inside a supervised perimeter. That holds for the determined few who seek these bets out anyway, but not for the many who never would.
Fewer than one in 20 Canadians have ever placed such a bet. Wealthsimple is not channelling a fixed demand into a safer venue. It is creating the demand — dropping a one-tap wager inside an app four million Canadians already use, and stripping out the friction that kept the casual gambler out. A safer venue that draws in far more people is not safer at all. It does harm at scale.
None of this is an argument for prohibition. It is an argument for getting the safeguards right — and in place before the mass launch, not after it.
Three changes
CIRO and the CSA should set the standard now. Three changes would do it.
First, screen for comprehension, not just income — confirm the buyer understands that the odds favour a small, professional minority.
Second, put a warning on every contract, in plain numbers: most people who trade these lose.
Third, collect and report outcome data from day one, rather than reconstruct it after the fact.
In 2017, Canada decided ordinary people should not be sold this bet. The ban now lasts only 29 days. On the 30th, it’s gone — and four million Canadians will be offered the very bet once outlawed to protect them.
