• by Laurie Sullivan , Staff Writer, Yesterday

Google has quietly redrawn its rules around advertising based on the types of companies that can and cannot run ads on its platforms. One category until now has largely remained off limits.

This updated policy will allow ads for Prediction Markets in the U.S. beginning January 21, but only to federally regulated entities. It means eligibility is limited to entities authorized by the Commodity Futures Trading Commission (CFTC) as Designated Contract Markets (DCMs) whose primary business is listing exchange event contracts.

There are clear lines around what is acceptable. Ads will have the ability to run across Google Search, YouTube, and on other Google-owned and partner platforms through the Google Ads network.

Limitations are due to inherent complexities, speculative nature, and unique regulatory classification involved in trading Prediction Market contracts and related products. The company defines these as "platforms that facilitate the listing of or provide customer access to Exchange-Listed Event Contracts related to economics, sports, or current events."

Google also said it will accept ads to run for brokerages registered with the National Futures Association (NFA) that offer access to products listed by qualifying DCMs.

The change presents an interesting twist. These prediction markets allows users to trade tied to real-life future events, ranging from economic indicators to sports results, as well as outcomes of political events. There were even bets on if oil prices would rise or fall by the end of the year, compared with the beginning of the year.

Prices move based on demand. They often reflect the collective belief of all bets in the market at a firm about how likely a specific outcome is to occur. There are all types of predictive markets such as who President Trump will nominate for the Federal Reserve Chairman.

Supporters argue that this market-driven approach often produces more accurate forecasts than traditional polling or expert commentary.

Now Google will allow these companies to run ads, but advertisers must also apply for Google certification to run ads in the U.S. This change includes a range of smaller, academic, or offshore platforms that have historically operated in regulatory grey areas.

Prediction Markets has opened concerns around issues such as election interference, speculative behavior and consumer protection.

Prohibited content still includes binary options and fixed-return contracts, online gambling, information or educational sites and blogs.