Balancing Gamification and Conflicts of Interest: What Retail Investing Can Learn from the Ontario Gaming Player Safety Approach
The gamification of retail investing has the potential to transform how individuals interact with financial markets online. According to the recently released Ontario Securities Commission's recent report Gamification and Retail Investing: Positive Use Cases and Mitigation Techniques, gamification can dramatically alter user behaviour. Associated OSC-sponsored research showed that non-economic points boosted trading frequency by nearly 40%, and social features like copy trading increased promoted stock trades by 18%. Whenever gamified design features are added to a platform, securities-regulated firms should consider addressing the potential conflicts of interest arising from these features to ensure platform engagement does not inadvertently prioritize firm interests over the client’s interests.
Securities Conflicts of Interest Framework
Securities regulation requires registered firms to identify, assess, and manage material conflicts of interest in their clients' favour, stemming from Client Focused Reforms (“CFRs”). Firms must avoid unmanageable conflicts (e.g., proprietary trading against clients) and should control others through policies like disclosure, separation, or restrictions, particularly where third-party compensation or platform design incentivizes higher-risk activities.
For trading platforms, conflicts of interest could arise if gamified features drive excessive trading or steer users to firm-favoured products. While some conflicts of interest can be addressed with disclosure, others may require active mitigation steps.
Adapting AGCO's Player Safety Model
Inspiration for how to address these issues may be found in another provincial regulatory regime. The Alcohol and Gaming Commission of Ontario’s (“AGCO”) responsible gaming and other requirements may offer a responsible engagement template that is adaptable to securities firms managing gamification-related conflicts of interest. The AGCO requires operators to monitor player behaviour, intervene on risk signals in ways that are tailored to the severity of the harm players may be experiencing, and implement controls like financial or time limits and friction, by treating promotions as potential harm sources. Transposed to investing, securities firms could integrate behavioural data into conflicts of interest oversight, using gamification datasets to detect patterns conflicting with client interests (e.g., churning driven by badges), and trigger reviews, required acknowledgements, voluntary limits, or information on where to get support.
The AGCO’s responsible gaming framework provides inspiration for these considerations, which collectively represent a principled response to potential conflicts of interest issues rather than a prescriptive checklist. The application of these ideas requires a detailed understanding of each firm’s clients, platform and gamification design, business model, and risk appetite.
Behavioural Monitoring for Conflicts of Interest
Securities firms could build risk-scoring models flagging spikes in trading frequency, short holds, or loss chasing as conflicts of interest indicators, prompting automated or other supervisory outreach. This approach could demonstrate conflicts of interest management by evidencing live processes responsive to foreseeable conflicts of interests resulting from design choices.
Friction and Client Controls
The AGCO mandates gaming platforms employ player limits on deposits, losses, and sessions. While avoiding similar mandated limits that could cause investor losses and liability, securities firms could give their clients the option to apply voluntary account-level caps on trading frequency, leverage, or daily losses, with enhanced prompts or default settings for novices. Firms could also consider offering to turn off gamification features for clients who exhibit risky trading patterns or diversions for loss-chasing orders to provide evidence of managed conflicts of interest. These controls position gamification as supporting engagement and fair outcomes, not exploiting user biases for the firm’s gain.
Promotions and Nudges
Gamified prompts like leaderboards or "popular stocks" could be considered to be conflicted recommendations if they push higher-margin products or increased trading fees. Securities firms could treat them under recommendation governance with responsible promotion standards, monitoring data-driven outcomes and adjusting accordingly. Mirroring AGCO rules, securities firms could also embed risk messaging alongside such prompts to ensure platform design does not unduly influence a client’s trading activity to their detriment.
Positive Gamification Design
As the OSC’s 2026 Report articulated, gamification can drive positive outcomes, not just negative ones. Nudges and badges embedded in trading platforms could redirect rewards to diversification scores, goal adherence, or KYC compliance. Dashboards warning of benchmark deviations could leverage data for conflict of interest mitigation, evidencing governance where positive features outweigh risks.
A Creative Conflicts of Interest Management Model
A responsible trading approach embedding monitoring, limits, standards, investor choices, and potential intervention inspired by responsible gaming could operationalize investment conflict of interest frameworks for digital platforms. In that way, securities firms could harness gamification's power while proving to regulators that design constrains conflicts of interest, letting clients—not the games—prevail long-term.
Next Steps
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About the Authors
Michael Holder (B.A. Western, LL.B. Windsor, MBA, Western) is the Managing Partner of North Star Legal, bringing more than 20 years of wealth management, legal, and compliance experience in Canada’s financial services sector. Having acted as Associate General Counsel and Chief Compliance Officer of Wealthsimple, Senior Legal Counsel at BMO Financial Group and a partner of one of Canada’s largest firms, Michael combines his practice and advisory work with teaching Fintech and Disruption of Banking at Ivey Business School.
Read Michael’s full bio here.
Martha Rafuse (B.A. Western, LL.B. Osgoode, LL.M London School of Economics), Counsel at North Star Legal, brings more than two decades of securities regulatory experience across the financial industry, private practice, and government. Before joining North Star Legal, Martha led large compliance teams for both Canadian and U.S. firms, including RBC Phillips, Hager & North Investment Counsel Inc., and RBC Dominion Securities Inc. (Retail). As Legal Counsel at the Ontario Securities Commission, Martha developed legal solutions for novel regulatory issues and led significant policy initiatives.
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Rijja Baig (B.A. University of Waterloo, B.S.W. University of Waterloo, J.D. University of Windsor) is an Associate Lawyer at North Star Legal practising in corporate, securities, and investment funds law. She completed her summer and articling terms at a national full-service law firm, where she gained experience in corporate matters, mergers and acquisitions, and securities litigation. Rijja earned her Juris Doctor from the University of Windsor Faculty of Law, and previously completed undergraduate and post-graduate studies in social work at the University of Waterloo. During law school, she served as a caseworker at Legal Assistance of Windsor, providing legal services in housing, social assistance, small claims, CERB, and immigration matters.
Read Rijja’s full bio here.