Brock professor says Canadian limits help curb prediction market risks
Brock University Professor of Finance Ernest Biktimirov says Canadian regulatory limitations will help curb prediction market risks, though issues remain. The academic warns that contracts structured as event X will happen by time Y create particular risk dynamics, including incentives to profit from outcomes that raise concerns about market integrity and manipulation risks. Biktimirov's assessment comes as prediction markets expand into Canada.
Biktimirov's framing matters because it establishes a template regulators in other jurisdictions may copy: accept prediction market entry but constrain the contract structure that creates the strongest manipulation incentives. For operators like Kalshi and Polymarket, already fighting state-level tax and licensing battles in Illinois and elsewhere, a Canadian precedent of structural limits adds another compliance layer to their expansion playbook. The core tension is between the binary payoff design that traders prefer and the integrity risks that regulators fear. Canada proves that capped or time-bound contracts reduce manipulation without killing liquidity, CFTC-registered platforms will face pressure to adopt similar guardrails domestically. The alternative is a patchwork where every national market writes its own contract specifications, fragmenting liquidity and raising technology costs.