Good morning. Prediction market trading has taken the United States by storm. In Canada, the controversial type of wagers on real-world events has been largely off-limits until recently. Regulators now face a tough balancing act – and young investors are already betting. That’s in focus today along with the end of the fashion haul.

Telecom: The CRTC has formalized new rules for streamers to fund and promote Canadian and Indigenous content in a move that could deepen a U.S. rift.

Labour: Employers are lobbying Ottawa to introduce legislation that would make it harder for workers in federally regulated industries to go on strike.

Artificial intelligence: Shareholder groups are pushing companies to adopt more stringent oversight measures when it comes to AI liability risks.

Over the past two months, I’ve spent an unreasonable amount of time thinking about whether Justin Trudeau and Katy Perry will get engaged.

Not because I particularly care (okay, maybe a little). But because on a platform called Polymarket, someone turned it into a financial trade.

Welcome to the world of prediction markets: One of the fastest growing and most controversial corners of finance right now, where users can trade on real world events.

I’m Meera Raman, a personal finance reporter at The Globe and Mail, and if you’ve talked to me at any point over the past two months, there’s a good chance I’ve brought up prediction trading. Against your will, probably.

My obsession with this topic started in March, when I broke the story that Wealthsimple had received approval to offer prediction trading in Canada. That was a pretty big deal because while prediction trading has boomed in the U.S., it’s been largely off limits in Canada.

At the time, I assumed it would be a normal business story... write it, file it, move on. Instead, I fell down the rabbit hole.

Since then, I’ve talked about prediction markets with fintech executives, regulators, skeptics, lawyers, traders, academics, tech bros and everyone in between. I’ve learned all about online contracts that let users trade on everything from interest-rate decisions to weather events to celebrity gossip.

Supporters say prediction markets can provide useful information and even help people hedge against economic uncertainty. Critics see something darker: a new form of speculative trading aimed at a generation that is already struggling with housing affordability, rising costs and economic frustration.

In Canada, only two companies have approval (Wealthsimple and Interactive Brokers Canada Inc.), and that approval comes with strict limitations. Companies can only offer contracts tied to economic indicators, financial markets and climate trends – not sports betting or election markets, which are some of the most popular contracts in the U.S.

Lawyers told me that it makes sense that regulators are starting to allow companies to offer this type of trading, because Canadians are already accessing U.S.-based platforms through virtual private networks. Meanwhile, younger traders are moving from meme stocks to crypto to prediction contracts, searching for faster gains (and maybe a little hope) in an economy in which traditional wealth building increasingly feels out of reach.

Jake Chung, a 21-year-old student in Bellevue, Wash., built an artificial intelligence model that scans sports broadcasts to help him predict, and wager on, whether certain words will be spoken during future games. Earlier this year, he placed a trade on whether the word “Jordan” would be mentioned in a sports broadcast. It was, and he made more than US$300 in seconds.

The discipline that goes into successful prediction trading is real. But so is the risk, because most people lose.

I also spoke with Nevin Burmeister, an 18-year-old in Andersonville, Ind., who said he lost more than US$2,000 on the prediction market platform Kalshi over six months, after early success convinced him that prediction trading was an easy way to make money.

“Once I got my first couple losses, instead of stopping and being responsible, I would chase them,” he told me. “I wanted my money back.”

He doesn’t use Kalshi as much these days. “I can’t really afford to do it anymore,” he said. He recently lost his job working at a bankruptcy firm and is actively looking for new work.