The boy, who can't be named, pleaded guilty Wednesday to two counts of sexual assault in youth court in Lethbridge.
A statement of facts presented in court said the boy created a game called Sex Club in the summer of 2013 which involved him and his sisters, who were seven and nine at the time.
Court heard the boy "rewarded' them with prizes such as their favourite soft drink if they agreed to play the game.
The sex games continued until July of this year when the girls told their father and he contacted police.
A pre-sentence report has been ordered and the boy will undergo psychological and risk assessment before he returns to court on Nov. 19.