CDC Gaming: Inside the latest prediction market news. October 17, 2026 · 6:57pm ET | 3:57pm PT Email, LinkedIn, and more 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."

IG Group's Underdog deal targets U.S. Prediction markets growth. IG Group (LON:IGG) said its proposed acquisition of U.S. sports gaming company Underdog would expand its exposure to prediction markets, daily fantasy sports and related products, while increasing the group's U.S. revenue contribution and customer base. At a shareholder seminar, Chief Executive Officer Breon Corcoran said the transaction, announced at the end of July, is intended to provide IG with access to a "high-growth adjacent category" spanning daily fantasy sports, prediction markets and other offerings. Underdog Co-Founder and CEO Jeremy Levine and IG Chief Financial Officer Clifford Abrahams also outlined the business's product, regulatory and financial position. Underdog reports rapid revenue and customer growth. Discover more Shop Handbags View Collections Discover Luxury Levine said Underdog's net revenue rose from $9 million in 2021 to $441 million in 2025, describing the company as the fastest-growing sports gaming company in the U.S. through its first six years. The business has more than 5.5 million deposited customers, he said. For the third quarter, Underdog reported net revenue of $105 million, up 118% year over year. Handle per customer increased 165%, average deposits per customer rose 109%, and monthly active customers grew 13%, according to Levine. He cautioned that the year-over-year comparison benefited partly from the sporting calendar, including World Cup activity during the quarter, and from comparison with an unusually weak margin period in the prior year. Results can also vary based on sports outcomes and player performance, Levine said. Underdog reduced marketing spending by more than 30% year to date as it rebuilt its product offering during a transition toward prediction markets. Levine said the company is preparing to increase marketing activity during its busiest period, which includes the NFL season and the start of the NBA season. Prediction-market strategy and product expansion. Underdog's historical core product was its Pick'em fantasy game, in which customers select multiple player-performance outcomes across different teams. Levine said the structure limited the types of choices available compared with online sports betting, including single selections, team outcomes and same-team player combinations. The company has since expanded through prediction markets. In July, Underdog launched its own full-stack exchange, UDX. Levine said the company holds the three required U.S. derivatives licenses: a futures commission merchant license, a designated contract market license and a derivatives clearing organization license. "We are the only sports first operator live with all three," Levine said. He said ownership of the full technology and licensing stack enables Underdog to capture economics across more parts of a transaction and provide customers with a single app, account and wallet. The company's orchestration layer routes orders across venues and regulatory structures, depending on the product and the customer's location. Underdog has also introduced new games, including Crash and Rips, and expects to launch a new market type called Supercharge. Levine said early signs of cross-selling between new games and the company's sports products have been positive, though he did not provide detailed figures. Regulatory flexibility remains central. Management acknowledged uncertainty surrounding the regulatory treatment of sports prediction markets. Levine said Underdog expects the issue to be largely resolved by the U.S. Supreme Court and believes a final resolution is likely next year. If federal oversight remains in place, Underdog believes its current exchange structure positions it well, he said. If authority shifts back to states, the company could move sports activity largely back into daily fantasy sports frameworks. Levine said that, if required, the company could make that product configuration change within roughly 30 minutes. Corcoran said he believes the eventual market structure could be a hybrid model and may involve local taxation, though he stressed that this was his personal view and that the Supreme Court will ultimately determine the legal outcome. Levine added that Underdog could evaluate expanding into regulated online sports betting if that became the best option for the business. IG expects greater U.S. scale and diversification. Abrahams said Underdog would more than double IG's U.S. revenue and increase U.S. monthly active customers by more than tenfold. On a combined basis, the U.S. would account for 41% of group revenue, compared with 19% currently. Prediction markets and daily fantasy sports would represent 27% of combined group revenue following the transaction, according to Abrahams. He said the acquisition would diversify IG's product mix and potentially reduce short-term revenue variability because Underdog's revenue streams are largely uncorrelated with IG's existing businesses. The transaction includes $1.1 billion of upfront enterprise value for 100% of Underdog at closing, equivalent to 2.4 times net revenue for the 12 months to June 2026. Sixty percent of the equity value will be settled through 24.1 million newly issued IG shares, with the remaining 40% funded in cash initially through a bridge facility. An additional earn-out of up to $200 million is tied to 2026 revenue, while a separate management incentive plan depends on Underdog achieving EBITDA targets in 2028 and 2029. Abrahams said the incentive structure is designed so that additional payments occur only if Underdog delivers its targets. Corcoran said IG views the deal as part of a broader effort to diversify beyond its historical concentration in U.K. over-the-counter contracts for difference and spread-betting products. He said IG will provide a strategy update focused on its existing businesses on October 22. About IG Group (LON:IGG). IG Group Holdings plc ("IG") is a FTSE 100 financial technology company operating at the intersection of retail trading, technology and capital markets. Through its trusted brands - IG, tastytrade, Freetrade and Independent Reserve - the Group serves over 1.3 million customers worldwide, providing leveraged trading, stock trading and investments, and cryptocurrency trading via its proprietary platforms. For more information, visit www.iggroup.com.