Google has updated its Chrome Web Store rules to prohibit prediction market extensions that facilitate real-money transactions, with enforcement set to begin on August 1, 2026. According to Google's latest update to its Developer Program policies, browser extensions that "facilitate or enable real money transactions on predictive outcomes" will no longer be permitted on the Chrome Web Store. Developers have until August 1, 2026, to comply, after which non-compliant extensions could face enforcement action, including removal from the marketplace. The policy revision comes at a time when prediction market operators are facing growing legal and regulatory pressure in the United States, particularly over sports-related contracts. Google announced the changes on July 1 through the Chrome for Developers blog, expanding its Regulated Goods and Services policy to name predictive markets as prohibited products, directly targeting extensions that allow users to conduct real-money transactions tied to future events.
Judge Analisa Torres of the Southern District of New York ruled Tuesday that Kalshi cannot block New York from enforcing its gambling laws against the prediction market platform's sports-related offerings while the company pursues litigation. As reported by Law360, the ruling means New York's case can continue to the motion-to-dismiss stage instead of being blocked at the start. Torres, known for her role in the Ripple case, has returned to the center of another major legal fight in the financial capital of the U.S. The decision is particularly significant given Torres's previous role in the landmark SEC v. Ripple case in 2023, delivering a ruling widely viewed as a partial victory for Ripple. New York Governor Kathy Hochul responded to the ruling, stating "Gamble with our laws and you're going to lose. Just ask Kalshi." Her comments came after New York's Attorney General accused the company of attempting to bypass state gambling laws, a position that survived Kalshi's effort to block the case.
New York Attorney General Letitia James disagrees that federal oversight preempts state gambling laws, and her office is now expected to file a civil enforcement action against Kalshi in state court seeking restitution, disgorgement, civil penalties, and injunctive relief. According to sports betting and gaming law attorney Daniel Wallach, this represents a major loss for Kalshi as it could potentially impact other ongoing cases. Prediction markets could be forced to obtain state licenses or restrict operations in New York, marking a significant shift from the current regulatory landscape. The enforcement action comes after Judge Torres found that Kalshi had not demonstrated that federal commodities law overrides New York's gambling regulations. State officials have maintained that prediction markets offering sports-based contracts can fall within existing gambling regulations when they operate without state authorization, with Hochul adding that her administration and the Attorney General would continue pursuing gambling platforms that they believe violate New York law.
The dispute centers on whether New York gambling laws can apply to Kalshi's sports event contracts, with Judge Torres rejecting Kalshi's core preemption argument that New York gambling laws are preempted by the Commodity Exchange Act (CEA). According to Wallach's analysis, Kalshi argued that the Commodity Exchange Act gives the CFTC exclusive control over its federally regulated contracts. However, Torres found that "New York gambling laws as applied to Kalshi's sports-event contracts are not preempted by the CEA." The court also determined that Kalshi had not made a clear showing that it was likely to win on the merits. Torres explained that courts apply a presumption against preemption with respect to areas where states have historically exercised their police powers, writing that such a presumption arises only when Congress legislates in a field traditionally governed by the states. This ruling deepens a circuit split over whether prediction markets are financial products or gambling products, with similar actions being challenged in several states.
North Carolina has become the first U.S. state to explicitly recognize the CFTC's authority over prediction markets while setting a 6% state tax on their trading fee revenue. Under Senate Bill 257, signed by Governor Josh Stein on July 7 as part of North Carolina's 2026 budget, platforms registered with the Commodity Futures Trading Commission, including Polymarket and Kalshi, can operate lawfully in the state from 2027. The legislation also states that the Commodity Exchange Act gives the CFTC "exclusive federal regulatory authority" over prediction markets. Taking effect on January 1, 2027, the new law will tax prediction market platforms at 6% of their net trading fee revenue generated from North Carolina residents, creating a substantially different tax treatment compared to sports betting operators whose tax rate increases from 18% to 23% of gross wagering revenue. The measure contrasts sharply with actions taken in several other states, where regulators have sought to bring prediction markets under state gambling laws, particularly for sports-related event contracts. Kentucky approved legislation requiring prediction market platforms to pay 14.25% of transaction fees, prompting the CFTC to sue the state, while Illinois folded prediction markets into its sports betting framework with a tiered transaction tax.
The decision lands during a broader battle over prediction markets, with the CFTC suing several states, including New Mexico, to stop state gaming rules from applying to federally regulated prediction market contracts. According to crypto.news, the fight has become a central topic for regulators and the industry, with CFTC Chairman Michael Selig suggesting the issue could reach the Supreme Court. Regulatory scrutiny has also extended beyond Kalshi, with New York filing legal action against Coinbase and Gemini, alleging that their prediction market offerings function as unlicensed gambling businesses under state law. Google has not linked its Chrome policy update to any individual enforcement case, however the timing places the new restrictions alongside mounting legal disputes involving prediction market platforms, leaving developers offering real-money event contract extensions with less than a month to comply before the August 1 enforcement deadline. Sports betting attorney Daniel Wallach said the ruling could have "domino effects" in related litigation, including the CFTC's lawsuit against New York, possible state enforcement against Kalshi, and pending preliminary injunction fights in Connecticut. The ban lands on a sector trading at record scale, with combined monthly notional volume reaching $291.38 billion as of June 22, according to Dune data.
For Kalshi, the New York ruling adds pressure at a time when sports contracts drive a large share of activity. As reported by crypto.news, sports-related contracts recently accounted for about 65% of Kalshi's total volume, while the company continued to court investors despite ongoing lawsuits. The ruling rejects a key part of Kalshi's argument at this early stage, though it does not determine the full outcome of the case. Losing access to sports contracts in New York, absent a stay or reversal, could be a significant blow to Kalshi because the Empire State is one of the largest sports betting markets in the country. The company's appeal to the Second Circuit represents a critical test of whether prediction markets will be treated as federally regulated derivatives or subject to state-by-state gambling regulations. New York officials welcomed the decision Wednesday, with Gov. Kathy Hochul and Attorney General Letitia James stating that New York's gambling laws are designed to protect consumers and that Kalshi "tried to ignore them." They said "We will continue to hold all gambling platforms accountable to the law — and that includes prediction markets."
