Ask a young person today to explain the difference between gambling and investing, and many will struggle to answer.
Six in ten Canadians participate in some form of gambling, and with mobile sports betting now living in anyone’s back pocket, Canada's gambling landscape is no longer confined to the casino floor. It’s virtually frictionless. The Canadian Investment Regulatory Organization's (CIRO) recent decision to approve forecast trading for Wealthsimple and Interactive Brokers Canada only deepens the concern. These futures contracts are limited to economic indicators, financial markets, and climate trends not election outcomes or sports results, but the approval is telling. Betting and investing are creeping closer together, and that convergence deserves scrutiny.
WHEN THE GAME IS RIGGED
South of the border, platforms like Polymarket and Kalshi have already blurred that line entirely. Any event imaginable can now be wagered on through a binary yes/no contract, from celebrity appearances to interest rate cuts. But when real money rides on real-world events, outcomes can be engineered by those with insider knowledge, as geopolitical analyst Ian Bremmer has argued in his case against political prediction markets:
“The day before the United States and Israel struck Iran on February 28, more than 150 accounts on Polymarket correctly bet it would happen on that specific date. At least six newly created wallets collectively earned approximately $1.2 million after buying contracts at prices as low as 10 cents. One account with the handle “magamyman” placed its first trade 71 minutes before news of the attack broke, when the market was pricing the probability at 17%. By the time the smoke cleared over Tehran, “magamyman” had turned $87,000 into $553,000. Another user netted $2.14 million across multiple contracts tied to the same strikes. Last week, a cluster of new accounts placed large bets on a ceasefire by late March or mid-April minutes before President Donald Trump posted about the “very good and productive conversations” between the US and Iran, gaining over $300,000 in unrealized value the moment his Truth Social announcement dropped. Two months earlier, an anonymous account had turned $38,500 into $485,000 betting on the capture of Nicolas Maduro, with its largest positions placed hours before the covert operation became public.”
In these markets, ordinary participants are trading against the very people capable of manipulating whether predictions come true at all. They’re set up to lose from the start. It is a fool's game in the most literal sense. It is also an insider trading problem, a market integrity problem, and a governance problem. When those in positions of power, influence, and authority can make decisions designed to win the largest bet, the incentive structure of public life itself becomes compromised.
BOTTOM LINE
At SANDSTONE, this is not something that we have any desire to be part of. Preserving and growing wealth remains our prime objective, and this is accomplished by ignoring the noise, greed, and FOMO to look for real value.
Whether you are a current client or considering our services, feel free to reach out to us at info@sandstoneam.com. We would love to have a chat about how we can help you achieve your financial goals.
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