Google has blocked prediction market operators from advertising in five states, as legal cases over the regulation of event contracts, specifically on sporting events, proceed across the country.
Under Google’s updated advertising policy, Kalshi and other prediction market operators cannot run ads targeting residents in Connecticut, Michigan, Nevada, New York, or Ohio.
Each state has sued prediction market operators to block them from operating within their jurisdictions. Sports-event contracts are not available in Nevada and Michigan.
The policy change was first reported by Dustin Gouker in his The Event Horizon newsletter and Search Engine Roundtable. Google added a section for prediction markets to the main Google Ads policies document last week.
The new section reads:
Due to the inherent complexities, speculative nature and unique regulatory classification involved in trading prediction market contracts and related products (defined as platforms that facilitate the listing of or provide customer access to exchange-listed event contracts related to economics, sports or current events), Google Ads only allows advertisements for these products in the locations listed in the location specifics section below, and only if they meet all of the following criteria:
- The advertiser is a licensed prediction market provider that holds all applicable local financial, commodity and/or gaming licenses, including those required as part of Google’s certification process.
- The products and ads comply with all local laws, financial regulations, industry standards and all other Google Ads policies. Advertisers are expected to do their own research on the local regulations for any location their ads target and comply with these.
- The targeted location is eligible for certification for advertising under this policy.
- The account has received certification and approval from Google to run ads about these products.
Underdog sues Tennessee after receiving cease-and-desist letter
Underdog is suing the state of Tennessee, the attorney general, and the Tennessee Sports Wagering Council after receiving a cease-and-desist order to block them from offering sports-event contracts in the state.
Last week, Underdog was warned that the state could pursue fines, civil penalties, and criminal investigations and revoke its fantasy sports operator license if the company doesn’t comply. In response, Underdog filed a lawsuit in the U.S. District Court of the Middle District of Tennessee Nashville Division on Tuesday.
The company is asking the court to block Tennessee from prohibiting them from offering event contracts, claiming they’re regulated by the Commodity Futures Trading Commission (CFTC) and that federal regulation exempts them from Tennessee’s gambling laws. “Any enforcement action by Tennessee would be meritless,” the lawsuit says.
In total, Underdog has sued seven states that have tried to ban the company from offering sports-event contracts: Washington, Connecticut, Massachusetts, New Mexico, Ohio, Wisconsin, and Tennessee.
S&P: Sports dominates prediction markets
Sports-event contracts continue to dominate the prediction market industry, according to a recent survey.
The S&P Global Market Intelligence Kagan Q3 2026 Consumer Insights survey found that while just 10% of respondents traded on a yes or no exchange over the past year, 70% of users traded sports event contracts.
“Due at least in part to widespread advertising during live sporting events, 42% indicated they were aware of prediction market operators, but had not used them,” the S&P survey found. “The largest percentage, 44%, reported they had never heard of the prediction market.”
While the types of events that can be traded are nearly limitless, the S&P survey asked prediction market users which category of trades they have participated in.
“For example, 70% said they had traded on sports-related outcomes, compared to 36% trading on economic or financial outcomes and 33% on political outcomes,” S&P noted.
The survey also found approximately one-quarter, 26%, indicated they had traded on news and entertainment outcomes and 11% cited trading on other outcomes, such as word mentions, weather, or cryptocurrency.
The survey data also shows that the majority of those trading on non-sports outcomes also trade on sporting events. For example, 68% of those placing trades on political outcomes also traded on sports outcomes.
BetMGM CEO expects Supreme Court to strike down prediction markets
Adam Greenblatt believes the U.S. Supreme Court will rule against prediction markets, telling analysts that their sports event contracts go beyond what Congress intended.
Greenblatt, CEO of Bet MGM, said he’s looking forward to the Supreme Court clarifying the legal uncertainty surrounding prediction markets. “I think the key test is whether this was the intent of Congress,” Greenblatt told analysts during a third quarter earnings conference call. “I think that it will be shown to not be the case.”
Greenblatt hopes to see an outcome from the Supreme Court in the 2026-2027 session, even though the justices have yet to decide whether to hear the case. The Supreme Court’s current term runs through June 2027.
In his comments, Greenblatt dismissed recent proposed rulemaking by the CFTC banning casino-style games on prediction markets.
“I think it’s just a matter of time before the casino-like products re-emerge in some other incarnation or just some other form,” Greenblatt said. “Just as easily as the rules were made or are being attempted to be made now, they can be undone and changed in the future.”
