Google Blocks Prediction Market Ads in Connecticut as State Blackout Grows

Google has blocked prediction market ads in Connecticut as the list of states where such advertising is prohibited grows. The addition of Connecticut means there are now five states where prediction exchange ads are blocked.

Google customers in Nevada, Ohio, Michigan, New York, and now Connecticut will no longer see prediction market ads in their searches.

Google spelled out a strict list of criteria for sites to advertise in certain states. Stipulations say that “products and ads” must “comply with all local laws, financial regulations, industry standards and all other Google Ads policies”.

That will be interesting news to the prediction market exchanges, who have argued for months that they do comply with financial regulations. The seemingly endless battle between the exchanges, the regulators, and the states now has a new player: the world’s largest search engine.

Google Ads Update Targets Exchanges

Google recently tightened its own regulations for advertising prediction markets in U.S. states.

Due the “speculative nature” and “unique regulatory classification” in trading on prediction markets, it said, Google Ads was restricting advertising to certain regions.

Google spelled out “location specifics” for prediction market providers wanting to advertise. Though Google lists “United States” as an “approved target location” (excluding the five states), there are other requirements.

The criteria include:

• Authorized as a Designated Contract Market (DCM) platform
• Prediction market providers must hold local financial, commodity, and/or gaming licenses
• Products and ads comply with local laws and financial regulations
• Accounts have received certification and approval from Google to run ads

Prediction Markets Caught Cold

The restrictions certainly make it harder for prediction markets to attract new customers while doing everything they can to comply with federal law.

Under the Commodity Exchange Act (CEA), predictions are regulated on a federal basis and overseen by the Commodity Futures Trading Commission (CFTC).

However, many exchanges are fighting running battles via their regulator with states who want control themselves.

Prediction markets say they are derivatives platforms that allow event contracts to be bought and sold. Therefore, it is right, they say, that they are regulated by the federal body.

However, states including Michigan and Connecticut argue that prediction markets are tantamount to sports betting and should be regulated as such.

Five States in the Google Cold

• Nevada: Silver State first to be blocked in January when Google announced its new ad policy.
• Ohio: Added to the exclusion list in June. Ohio won a legal battle against Kalshi in September.
• Michigan: Added in July. Michigan has been running a long campaign against prediction markets. Coinbase is the latest prediction exchange to drop sports contracts in Michigan.
• New York: Also blocked from Google Ads in July. NY AG Letitia James and Gov. Kathy Hochul have filed a suit against Polymarket for advertising “illegal wagers” to New Yorkers.
• Connecticut: Added to Google’s exclusion list this month. Connecticut sued Kalshi in August, citing “unlawful sports betting” violations.

CFTC Effectively Overruled 

Google is still moving to block customers in some states from seeing ads, despite prediction markets being regulated as DCMs.

There is therefore no guarantee that CFTC oversight guarantees blanket ad coverage in all states. Not only will it cheer states who have been fighting running battles with the exchanges, but it could encourage prediction markets to drop more of their services to comply.

Some prediction market exchanges have already dropped their sports event contracts to comply with local betting rules. More could follow if it means a route back into Google’s good books.

Could Supreme Court Ruling Bring Back Google?

What is certain is that the legal challenges and updated Google ad policies increase the chances of a Supreme Court resolution at some point.

States have both won and lost fights in the appeals courts as to whether they get to regulated prediction markets. Ultimately, it will come down to the U.S. Supreme Court, with some expecting the highest court in the country to rule next year.