Google Restricts Prediction Market Advertising in Five US States

The advertising landscape for digital prediction markets is currently undergoing a massive transformation. Google updated its Google Ads policies again in October 2026, blocking access for operators of event contract platforms in five US states. The markets in Connecticut, Michigan, Nevada, New York, and Ohio are affected. The background is escalating legal disputes between operators and state regulatory authorities, who see these contracts as a bypass of gambling laws. Sports betting contracts are particularly under scrutiny, as they are generally prohibited in Nevada and Michigan.

Google's decision follows a series of lawsuits and cease-and-desist orders. For instance, Connecticut was recently added to the list of blocked regions after the state initiated legal action. Operators such as Kalshi or Underdog must now prove they hold all necessary financial, commodity, or gambling licenses to be allowed to advertise in the remaining regions at all. Google also requires specific certification for each advertising account, significantly raising the hurdles for this niche industry.

Numbers and facts

A recent report from S&P Global Market Intelligence Kagan for the third quarter of 2026 shows the enormous importance of sports for this sector. According to the report, 70 percent of users active on prediction markets traded sports event contracts. In comparison, only 36 percent accounted for economic or financial outcomes and 33 percent for political outcomes. Despite media attention, these platforms are not yet a mass phenomenon. Only about 10 percent of respondents stated they had traded on a corresponding exchange in the past year. At the same time, 44 percent stated they had never heard of prediction markets.

The situation is particularly explosive for the company Underdog. The provider has now sued seven states, including Washington, Connecticut, Massachusetts, New Mexico, Ohio, Wisconsin, and Tennessee. In Tennessee, Underdog responded to a cease-and-desist order with a lawsuit in the US District Court. The state had threatened to revoke the fantasy sports license and initiate criminal investigations. Underdog argues that their products are regulated by the Commodity Futures Trading Commission (CFTC) and therefore do not fall under state gambling laws.

Background

The core of the conflict lies in the definition of the products. Are they financial derivatives or disguised sports bets? Adam Greenblatt, CEO of BetMGM, expressed skepticism about the future of these markets in court during a conference call on third-quarter results.

"I think the key test is whether this was the intent of Congress. I think that it will be shown to not be the case." - Adam Greenblatt, CEO of BetMGM

Greenblatt expects the Supreme Court to provide clarity in the 2026 and 2027 session. He assumes that current offerings go beyond what was legally intended as commodity trading. Meanwhile, the CFTC is attempting to ban casino-like bets on prediction markets through new rules, which industry experts say might only lead to new evasive maneuvers by providers.

Why it matters for German players

For German users, these US-specific prediction markets like Kalshi are effectively inaccessible because they do not hold a license from the Joint Gambling Authority of the States (GGL). In Germany, the State Treaty on Gambling 2021 (GlüStV 2021) strictly regulates which types of bets are permissible. Prediction markets that disguise sports bets as financial contracts would be immediately classified as illegal gambling in this country. German players benefit from high protection standards with licensed providers, such as the monthly deposit limit of 1,000 euros via the LUGAS system and the stake limit of 1 euro per spin for slots. Anyone acting on unregulated platforms has no legal certainty and risks the blocking of accounts without the possibility of payout.

What it means for GGL-licensed casinos

German casinos with a GGL license can observe this trend calmly. Since regulation in Germany distinguishes very precisely between financial products and gambling, there is little room for such gray-area models. For licensed operators, Google's strict line in the US represents a confirmation that platforms without a clear local gambling license are increasingly being pushed out of major advertising networks. In the long term, this strengthens the channeled market, as players are less likely to encounter dubious "event exchanges" that offer no player protection measures.