Canadian Gaming Association welcomes the guidance which confirms sports wagering belongs within provincial gaming regulation
The Canadian securities and investment regulators have provided new guidance to clarify that certain types of event contracts should not be regulated within securities and derivatives legislation.
In Canada, financial rules are set by the Canadian Securities Administrators (CSA), a national council made up of the country’s provincial market regulators, which are then enforced by the Canadian Investment Regulatory Organization (CIRO), the frontline watchdog that directly oversees investment firms, financial advisors and market trading.
In a joint notice addressing event contracts based on sports and entertainment outcomes, their guidance clarifies that in the view of the CSA, these should not be regulated within securities and derivatives legislation, and that CIRO does not consider it appropriate to facilitate or approve an application by their dealer members to trade these types of event contracts.
“It is important for investors and market participants to understand that event contracts based on sports- or entertainment-related activities or outcomes should not be regulated within securities and derivatives legislation,” said CSA chair Stan Magidson, who is also chair and CEO of the Alberta Securities Commission. “This notice provides important clarifications regarding the role and responsibility of Canadian securities regulators when it comes to certain types of event contracts.”
With respect to the regulatory status of other types of event contracts not addressed in this guidance, assessment is ongoing.
Regarding the current regulatory framework, two CIRO dealer members have so far been authorized to facilitate the trading of a limited set of event contracts.
These CIRO dealer members must comply with certain terms and conditions set out by CIRO, in consultation with the CSA, and such activity may be subject to further restrictions or other changes in the future.
The Canadian Gaming Association (CGA) welcomed the CSA-CIRO guidance, which confirms sports wagering belongs within provincial gaming regulation.
“The Canadian Gaming Association welcomes today’s guidance from CSA and CIRO staff,” said CGA president & CEO Paul Burns. “It brings clarity to a question that matters a great deal to Canadian consumers, provincial governments, and the licensed gaming industry: sports wagering is sports betting, whatever the platform, and it belongs within the framework that provinces have built specifically to regulate it.”
The CGA has long held that sports wagering, in whatever form it takes, should be offered only through provincial gaming regulators, and that the framework governing a product should be determined by what it does, not by what it is called.
“Online gaming and sports betting are entertainment products,” continued Burns. “The CGA recognizes that more companies may seek to enter prediction markets and that securities regulations may evolve over time.
“The Association is ready to work with CSA, CIRO, and provincial regulators as further guidance is developed, and to support efforts to ensure a consistent, high standard of consumer protection for sports wagering across Canada, regardless of how a product is structured or marketed.”