Wealthsimple’s new prediction markets app recently launched, in partnership with Kalshi, an American prediction market platform. It’s only the second firm in the country authorized by Canadian Investment Regulatory Organization (CIRO) to do so, after Interactive Brokers Canada.

Prediction markets allow users to trade and invest in real-world outcomes by purchasing a contract tied to the outcome of a real-world event.

Users typically place a binary yes-or-no bet on a wide range of events: sports outcomes, elections, political events, economic data, corporate earnings, the price of commodities, climate change, geopolitics, cultural events and even entertainment events. Taylor Swift and Travis Kelce’s recent wedding, for instance, generated millions of dollars in wagers.

The price of an individual contract changes based on the probability of the event occurring, with prices fluctuating based on news or speculation around a specific event. Events can be immediate or long-term.

Wealthsimple’s app will give Canadians access to nearly 4,000 of Kalshi’s event contracts, with restrictions. Contracts must have a maturity term of 30 days or longer and are limited to three categories: economic forecasts, environment forecasts and financial indicators.

CIRO has said other categories, including elections, political events like party leadership races or referendum results or contracts tied to unlawful activities under Canadian law, remain strictly prohibited.

A booming global industry

Wealthsimple’s launch is a small entry........

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