Maryland residents must stay away from prediction market trades on the outcome of elections or risk prosecution for illegal wagering, the state’s top elections official warned.
Residents who traded on the outcomes of congressional and gubernatorial primary races made illegal wagers, State Elections Administrator Jared DeMarinis said in an interview with the media outlet Maryland Matters.
Maryland voters went to the polls for primaries on June 23, with most counts almost complete at the time of writing.
“They are making a bet,” said DeMarinis. “Putting money in the prediction market, saying a candidate is likely to win or lose the election, is making a wager.”
The comments will likely stoke the ire of the Commodity Futures Trading Commission (CFTC), which has repeatedly said it alone has the authority to regulate prediction market operators such as Kalshi and Polymarket.
The CFTC says Kalshi and Polymarket offer swap deals, not wagers. And this, it says, means states cannot apply their gambling laws to prediction market platforms.
This has led to an impasse, with many states filing lawsuits against Kalshi and Polymarket. The CFTC has hit back, filing lawsuits against nine states.
Maryland Prediction Market Regulation May Be Incoming
DeMarinis also suggested Maryland could seek to join the growing number of states that have tried to take on regulators and prediction market players in court.
“Whether or not I go after the prediction markets, I don’t know,” said DeMarinis. “This is something we are looking at, and it’s definitely under review.”
The elections chief also warned that the risk of insider trading on Maryland election-related outcomes was high.
“This is something that could have real implications for the integrity of elections. It goes right to the heart of our electoral process,” DeMarinis said.
But the CFTC has already fired a warning shot.
The same media outlet quoted a CFTC spokesperson as stating that Maryland “can see the actions the commission has taken against other states who have tried to bypass federal law and attempted to regulate our markets.”
“We plan to continue defending our jurisdiction,” said the spokesperson.
Traders Win Big on Maryland Primaries
On Kalshi, scores of Maryland primary contracts paid out in recent hours. Trading volumes on some popular contracts rose above the $100,000 mark.
Traders put almost $84,000 into contracts on the outcome of the Republican Party gubernatorial race.
On Polymarket, meanwhile, traders won big on the outcome of the MD-01 Democratic primary, with 97% of traders backing the victor, Dan Schwartz. Trading volumes for a Schwartz victory rose above the $11,000 mark ahead of the election.
Last year, the University of Maryland warned that problem gambling is on the rise in the Old Line State.
Per a survey of 3,600 residents, almost 6% admitted to having gambling problems. That marked a rise of over 40% since the state legalized mobile and online sports betting in 2022.
Youth gambling addiction is also on the march, experts say.
“We have had children call us and say that they are sports betting and that they are betting with their bookie at high school,” an official from the Maryland Center of Excellence on Problem Gambling told CBS News in December.
Maryland lawmakers have countered this year by moving to ban sweepstakes casino platforms.
