Bets on the London mayoral race have appeared on Polymarket, though Canadians are prohibited from such wagers
Polymarket is an American prediction market platform where participants trade contracts on the outcomes of real-world events
THE PREDICTION MARKET platform Polymarket has opened trading on contracts tied to the outcome of the Mayor of London, Ontario election. The pool has already accumulated more than $6,000. Although prediction market wagers on political elections are not permitted in Canada, the platform remains accessible to users from other jurisdictions.
The list of candidates looks like a ballot on screen, but it is an entirely different document
The Polymarket page lists the names of candidates in the mayoral race: incumbent mayor Josh Morgan, along with challengers Susan Stevenson, Kirsten Krose, and John Fyfe-Millar. However, this list does not invite a simple checkmark beside a name. Each name here represents an outcome on which a monetary wager can be placed. The total amount of funds committed has already surpassed $6,000.
How prediction markets work and how they differ from sportsbooks
Polymarket is an American prediction market platform where participants trade contracts on the outcomes of real-world events. The range of topics is broad: from Bitcoin price movements to which celebrity couples will marry or divorce. All wagers are built on the principle of binary outcomes, where only one of two answers is possible: “yes” or “no.”
In addition to the London race, similar markets have been opened for mayoral elections in other Ontario cities: Windsor, Toronto, Stratford, and Waterloo.
Users trade against each other, not against “the house”
At first glance, the Polymarket interface resembles a familiar sportsbook menu, but the mechanics are fundamentally different. There is no “the house” setting betting lines through oddsmakers. Users place wagers against one another, taking opposite sides of the same contract. The price of each contract fluctuates between one cent and $1, and the approximate payout for a correct prediction is close to one dollar, minus the platform’s fee.
The specific figures for the London race (as of Wednesday) are as follows:
- A contract on Josh Morgan winning is priced at 64 cents. This means a bettor risks 64 cents and receives just under a dollar if the incumbent mayor is re-elected.
- A contract on Susan Stevenson winning is priced at 15 cents.
Wagers scale easily. For example, a contract paying out $1,000 on a Morgan win would require an outlay of $640. In addition, a contract can be resold before the outcome is determined at the current market price, locking in a profit or loss in advance.
What is permitted in Canada and what remains beyond the bounds of the law
Canadian regulators have permitted limited prediction market trading in only three categories: economic indicators, financial markets, and climate trends. Wagers on sports, elections, and pop culture are prohibited. Only two platforms have been approved for Canadian users: Wealthsimple and Interactive Brokers Canada.
Formally, opening an account on Polymarket from Canada is not possible, but some users circumvent the restrictions by choosing to mask their location using a VPN. The market on Canadian elections exists because the platform accepts wagers from participants in jurisdictions where such restrictions do not apply.
That said, the inability to legally participate in prediction markets does not mean Canadians are far removed from gambling entertainment. On the contrary, interest in it has been growing steadily across the country, driven in large part by the accessibility of online platforms. iGaming industry experts who assisted in the preparation of this article confirm that Canadian users are actively seeking ways to play without initial deposits. According to the authors of one resource that publishes reviews of no-deposit bonuses for online casinos, a notable share of visitors comes from London, Ontario. This indirectly confirms that residents of smaller cities are no less engaged in the digital gaming environment than those living in major metropolitan areas. Turning to prediction markets, it is precisely this level of engagement that makes the regulatory challenge especially acute at the municipal level.
A thin market, a major player, and the shadow of insider trading
The mixing of elections and monetary wagers calls into question the integrity of the democratic process itself. Ernest Biktimirov, a finance professor at Brock University, considers the Canadian ban on election markets entirely justified and identifies a broad range of threats.
The primary concern relates to the thin market nature of local elections. In large races such as Toronto’s, moving a contract price with a single wager is extremely difficult. In smaller cities, the situation is fundamentally different.
“This is a thin market. The number of traders is small, and one person with a large sum can move the contract price,” Biktimirov explained.
The risk of insider trading is equally serious. People working within campaign teams, or candidates themselves, may use non-public information about the course of a campaign to generate profit. In the United States, this problem has already moved from the theoretical to the practical: Kalshi blocked three political candidates suspected of placing wagers on their own campaigns. One of the cases involved a race for a Senate seat.
When odds begin to look like a public opinion poll
If a market is susceptible to manipulation, the published odds may appear convincing while in reality failing to reflect the true balance of forces. Voters may come to perceive those odds as the equivalent of a public opinion poll. Noah Vanderhoeven, a researcher at The Body Politics Lab at Western University, points to the specific mechanism behind such distortion.
“The risk is that someone puts a large sum into one position, and that does not necessarily reflect the actual polling picture. And it can influence people’s decision-making,” Vanderhoeven noted.