Maryland Joins Montana in Issuing Kalshi With Cease and Desist Orders

It has emerged that Maryland has joined the growing list of states that have issued cease-and-desist letters to New York-based prediction market platform Kalshi.

In what amounts to an escalating crackdown on federally regulated prediction markets, Maryland has called to terminate sports event contract trading, declaring it a form of unlicensed sports betting.

Maryland’s state regulators—the Maryland Lottery and Gaming Control Commission—appear to have chosen to tackle the issue head-on. They have sent cease-and-desist notifications to Kalshi, Robinhood, and Crypto.com, demanding they immediately void sports-related event contracts within state lines.

The move makes the Old Line State the sixth known state alongside Ohio, Illinois, New Jersey, Nevada, and Montana to take regulatory action against the trading platforms.

Looking to emphasize the perceived nature of unlicensed and unauthorized sports wagering under Maryland law, John Martin, Director of the Maryland Lottery and Gaming Control Agency, wrote, “Kalshi is operating in Maryland and is offering and conducting what is, in fact, wagering on sporting events.”

As stated in the letter dated April 7, Kalshi has been given 15 days to respond to Maryland’s demands and confirm whether it intends to comply. Failure to do so may lead to legal challenges, though the state has not yet announced any court action.

Montana One of the First to Take Action

While the Nevada Gaming Control Board was the first to send out a cease and desist order, Montana was not far behind, despite its statement of intent being overshadowed by New Jersey’s similar announcement the following day.

Montana’s Gambling Control Division’s objections to Kalshi stem from its certification that the firm’s sports contracts meet the legal definition of gambling under MCA § 23-5-112(14)(a).

Jeremy S. Craft, Chief Legal Counsel for Montana’s DOJ Gambling Control Division, highlighted the state’s objections, stating Kalshi lacks the appropriate Montana gambling license to operate legally in the state, writing: “Kalshi’s event contracts are gambling… because participants risk money or other things of value for a gain that is contingent… upon lot, chance, or the operation of a gambling enterprise.”

To date, Kalshi has facilitated more than $380 million in NCAA March Madness traded contracts, which included wagering on college teams, Houston, and eventual men’s championship winners Florida. The platform’s lucrative contract exchange expansion follows the New York organization’s entry into major sporting events, including the Super Bowl and now March Madness, which has ignited the scrutiny of the six state gambling regulators.

Will Kalshi Push Back in Maryland?

For the time being, Kalshi, Robinhood, and Crypto.com have all cited their regulatory approval from the federal Commodity Futures Trading Commission (CFTC) as justification for their operations in each state.

Kalshi, the most high-profile of the trio, argues that its contested product offerings are, in fact, financial derivatives and should be treated like other federally regulated instruments. “The CFTC is our regulator. If the CFTC tells us to stop, we will absolutely stop. If they don’t, then we won’t,” Kalshi CEO Tarek Mansour told TechCrunch.

Mansour directly compared Kalshi to a financial exchange where the underlying asset is an event, not a commodity. He also claimed that the gambling lobby was orchestrating the complaints, arguing that sportsbooks like FanDuel and DraftKings are pressuring state regulators because it directly threatens their state-licensed operations.

With Kalshi having already filed lawsuits against Nevada and New Jersey claiming that state-level orders violate the federal Commodity Exchange Act, insiders expect similar legal battles will follow now in Maryland and Montana.

As things stand, Kalshi says it will remain in operation in all 50 states, pending further federal or judicial intervention.