A Canadian fintech startup seeking to build the country’s first authorized prediction market is moving west after months of consultations with Ontario’s securities regulator failed to produce a clear pathway to approval.
The Toronto Prediction Exchange, launched in December 2025, plans to re-incorporate in B.C. and relaunch as the Vancouver Prediction Exchange in the coming weeks, according to the exchange’s co-founder and chief technology officer MJ Lee.
“Our consultations with the [Ontario Securities Commission] have been constructive,” Lee told Canadian Affairs in an email. “We’ve found common ground on key issues and have laid the groundwork for a potential pilot.”
But Lee said the pace of discussions with Ontario’s regulator did not align with the demands of a new player attempting to establish itself in a rapidly evolving industry.
“We’ve found that the pace of engagement doesn’t always match the urgency we feel as a startup trying to bring a novel product to market,” he said.
Lee says B.C., by contrast, offers a more promising regulatory environment.
So far, the Ontario Securities Commission is the only Canadian authority to engage directly with prediction markets. In 2025, it barred Polymarket, one of the world’s most popular prediction markets, from operating in Ontario.
The OSC’s ruling hinged on a 2017 ruling by the Canadian Securities Administrators (CSA), an umbrella regulatory council, which banned the sale of short-term, yes-or-no contracts that it classified as binary options.
Unlike other provinces, which adopted the CSA’s 2017 ban on retail binary options trading, B.C. maintains its own separate regulatory framework governing binary options.
Lee says discussions with the BC Securities Commission (BCSC) have been encouraging.
“We find the BC Securities Commission to be exceptionally collaborative and responsive,” he said.
“Beyond B.C.’s existing regulatory framework around binary options, the BCSC has demonstrated a genuine willingness to engage with us on the nuances of prediction markets.
“That kind of partnership is critical when you’re developing something new, and it gives us confidence that B.C. is the correct home for our new exchange.”
In February, Canadian Affairs sought comment from the Ontario Securities Commission regarding the regulatory requirements a prediction market platform would need to meet to operate in the province. It did not receive a response.
The OSC did not respond to a subsequent request for comment sent outside of business hours on the date of publication of this article.
‘Very productive’
Prediction markets allow users to trade “yes-or-no” contracts tied to whether a specific event will occur by a certain date. Contract prices reflect the market’s estimated probability of an outcome, and pay out if a stated outcome occurs.
On the current dominant platforms, U.S. companies Polymarket and Kalshi, individuals can bet on a wide range of events, such as elections, sports games and corporate takeovers.
In the United States, the federal Commodity Futures Trading Commission regulates these platforms as “event contracts” exchanges.
In Canada, by contrast, the regulatory framework is unclear. Federal officials have said prediction markets fall outside their jurisdiction, and have not been clear about whether they view these markets as subject to securities or gambling regulation, Canadian Affairs recently reported.
“Questions regarding prediction markets may be best directed to the appropriate provincial authorities,” a Department of Finance spokesperson told Canadian Affairs in a Feb. 9 emailed statement.
Lee says that his team’s conversations with the B.C. securities regulator have been “very productive,” but have also pushed the company to adapt.
“We’ve had to answer some tough questions and adjust our plans around technology, governance, oversight, surveillance, and more,” he said in his email.
Currently, the company’s exchange only runs mock money markets using virtual currency as it awaits regulatory approval and seeks to improve the user experience.
A focus on forecasting
Unlike many existing prediction platforms that feature wagers on sports, politics and pop culture, the Vancouver Prediction Exchange intends to exclusively list more traditional contracts — at least at first.
These include contracts related to weather outcomes, Bank of Canada interest rate decisions, employment figures, inflation data and corporate earnings, says Lee.
“We chose these categories because the economic impact of them is apparent, and they are at near-zero risk of insider trading and market manipulation,” he said.
The platform also intends to avoid sports-related prediction contracts, which are often a top source of trading volume on Polymarket and Kalshi.
“Even if sports predictions are technically not gambling under current law, common sense tells you they are,” said Lee. “They provide no meaningful economic value and are best regulated by the various gaming commissions across the country.”
The Vancouver Prediction Exchange will operate as a market exchange rather than a brokerage, says Lee. This means it would provide the infrastructure for contracts to be traded, while registered dealers would handle customer accounts, onboarding and regulatory compliance.
“There are plenty of extremely competent and trusted CIRO-registered dealers in Canada,” he said, referring to investment dealers registered with the Canadian Investment Regulatory Organization.
“There are only six recognized exchanges in Canada, none of which offer prediction contracts.”
“We believe we can provide the most value to the market as an exchange rather than a dealer.”
Proceeding with caution
Polymarket, in particular, has attracted significant scrutiny for allowing traders to speculate on everything from nuclear deals to terrorist designations to ceasefire agreements.
The Vancouver Prediction Exchange may eventually consider listing a broader array of contracts, says Lee, but only with safeguards in place.
“Predictions undoubtedly have predictive value regarding geopolitical conflicts, and predicting these conflicts clearly has economic value,” he said. “For example, conflict in the Middle East directly impacts oil futures.”
Lee acknowledges that these markets pose risks.
“We have ethical concerns about potentially incentivizing politically exposed persons to act in ways that would influence a prediction market,” he said.
“We do see a future where we list these types of contracts, provided we can develop a framework that balances the public interest and avoids adverse consequences.”
For now, Lee’s company plans to focus on launching a pilot exchange with less controversial contracts and working with regulators to ensure compliance.
Lee’s exchange hopes to launch real-money contracts on its exchange later this year if consultations with regulators proceed smoothly.
“We cannot commit to a date for the pilot launch, but are optimistic that a launch will happen within this year,” he said.
“If dealers integrate quickly, we may potentially launch this summer.”
Clarification, March 8, 2026 12:54 pm: This article has been updated to indicate Canadian Affairs previously sought comment from the OSC regarding the regulatory requirements a prediction-market platform must meet to operate in the province, but did not receive a response. The piece has also been updated to indicate that the OSC did not respond to a subsequent request for comment sent outside of business hours on the date of publication of this article.
