Lynnae is a journalist covering the intersection of technology, culture, and gambling. She has more than five years of experience as a writer and editor, with bylines at SlashGear and MakeUseOf. On the iGaming side,...
Read Full BioMaryland is now the seventh state to warn its gambling licensees about involvement in sports prediction markets, becoming the latest jurisdiction to target what regulators increasingly view as a gambling loophole created by these platforms.
In a November 19 letter addressed to casino operators, sports wagering licensees, and fantasy contest operators, the Maryland Lottery and Gaming Control Commission explained that certain CFTC-regulated event contracts qualify as unlicensed sports wagering under state law.
In the notice, the Commission wrote that “‘Illegal activity’ includes engaging in, operating, offering, or facilitating access to prediction markets on a DCM for gaming contracts styled as ‘sporting event contracts’ without a valid Maryland sports wagering license to do so.” They added that this type of activity could affect a licensee’s standing, saying, “Illegal activity in any jurisdiction may bear negatively on your qualifications for a Commission-issued license, registration, or certification in Maryland.”
The Commission goes on to warn operators that “any direct or indirect association, for any financial gain, with any unlicensed person that allows individuals to buy, sell, or trade sporting event contracts on a DCM is an ‘illegal activity.’”
Later in the notice, operators are reminded of their duty to report “any material change in licensing information, or any change in circumstance that is relevant to a licensee’s suitability,” and said it “expects any licensee that is actively pursuing any involvement with an exchange or DCM that is regulated by the CFTC to provide prompt notice to the Commission.”
April Cease-and-Desist Letters Targeted Kalshi, Crypto.com & Robinhood
The warning follows a cease-and-desist order issued on April 7, directing prediction-market operator Kalshi to halt its sports-based contracts in the state. In the notice to Kalshi, the regulators said the company was not “authorized under Maryland law to offer wagers on sporting events.”
As a result, the state ordered the company to “immediately cease and desist offering in Maryland its event contract … and any other contract or product that provides an investing opportunity based on predicting the outcome of any sporting league play or any sporting event.”
On the same day, Maryland sent cease-and-desist letters to Crypto.com Derivatives North America and Robinhood Derivatives, expressing similar concerns, as part of a broad regulatory effort targeting sports-event derivatives. In its notice to Crypto.com, the state ordered the company “to immediately cease and desist offering in Maryland its ‘Event Contract’ and any other contract or product that provides an investing opportunity based on predicting the outcome of any sporting league play or any sporting event.”
The Commission added that Crypto.com was “offering and conducting what is, in fact, wagering on sporting events” without a Maryland license.
In its letter to Robinhood, Maryland directed the company to “immediately cease and desist offering in Maryland its event contracts, college basketball tournament event contract, or any other product that provides an investing opportunity based on predicting the outcome of any sporting league play or any sporting event.”
Legal Challenges Followed Maryland’s April Cease-and-Desist Orders
In April 2025, both Kalshi and Crypto.com Derivatives North America filed lawsuits challenging Maryland’s cease-and-desist orders. Crypto.com sued the Maryland Lottery & Gaming Control Commission on April 21, arguing the state “has no jurisdiction to regulate or prohibit these sports event contracts” and that its offerings comply with federal law.
Kalshi also sought a preliminary injunction to block Maryland from enforcing its April 7 order, but a federal judge denied that motion on August 1. In that ruling, U.S. District Judge Adam B. Abelson concluded Kalshi had not demonstrated a likelihood of success on its argument that the Commodity Exchange Act preempts Maryland’s gambling statutes.
In mid-August, Maryland agreed to pause enforcement, allowing Kalshi’s event contracts to remain available in the state while the Fourth Circuit considers the company’s appeal.
Six Other States Have Already Taken Similar Positions
Ohio, Arizona, Michigan, Nevada, Illinois, and Massachusetts have already sent similar notices to operators, warning them about prediction market contacts based on the results of sporting events. The addition of Maryland brings the total number to seven, reflecting the increased scrutiny of sports-based prediction markets at the state level.
In all of these jurisdictions, regulators have taken the position that contracts based on the results of sporting events are the equivalent of wagering under the laws of their states, even if those contracts are available on federally regulated platforms.
While the regulatory language may differ from one state to another, the concern is the same across states: contracts that allow individuals to buy, sell, or trade event-based outcomes function as wagers and therefore require a state license.
With this warning and its April cease-and-desist actions, Maryland has signaled that the state is prepared to treat sports-event contracts as unlicensed wagering. As more states adopt similar positions, the pressure on prediction-market operators will continue to increase nationwide.
