Maryland Becomes Fifth State to Order Halt of Sports Prediction Markets
Maryland has officially become the fifth U.S. state to issue a cease-and-desist order against companies operating sports prediction markets, citing violations of state gambling laws. On Monday, the Maryland Lottery and Gaming Control Commission confirmed that it had sent formal notices to Kalshi, Robinhood, and Crypto.com, demanding an immediate halt to their operations involving what regulators call "sports event trading."
LISTEN TO THIS ARTICLE:According to the commission, the products offered by these companies are functionally identical to traditional sports wagering, which is only legal in the state when conducted by licensed operators. The move aligns Maryland with a growing list of states taking action against what they view as unlicensed sports betting activities being disguised as financial instruments.
Related: Kalshi, Other Prediction Markets Challenged as More States Raise ConcernsNevada, New Jersey, Ohio, and Illinois have already issued similar cease-and-desist directives, while several other states are reportedly reviewing the legality of such platforms within their jurisdictions. These decisions highlight the growing scrutiny surrounding sports event prediction markets, which operate on the outcomes of sporting events in a manner regulators say mirrors sportsbook betting.
In its communication to the companies, Maryland Lottery and Gaming emphasized that the services being offered via their digital platforms resemble sports betting in every material way. The platforms allow users to trade on the results of sports games, effectively placing bets on game outcomes.
Under Maryland law, such activity falls within the legal definition of sports wagering, which is restricted to entities that are licensed by the state. These operators must also comply with strict regulatory protocols, including age verification to ensure all participants are at least 21 years old, as well as geolocation requirements to confirm that wagers are placed from within the state's borders.
State regulators pointed out that Kalshi, Robinhood, and Crypto.com do not comply with these measures, which are mandated under Maryland's legal sports betting framework. In particular, the lack of identity checks, age verification, and location tracking is seen as significant regulatory gaps that disqualify these companies from operating legally in the state. The Maryland commission's action is a clear indication that it views these prediction markets not as commodities exchanges, but as unauthorized gambling platforms operating outside the law.
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Prediction Markets Continue to Fight Back
Kalshi, which has gained national attention for offering markets on real-world outcomes, maintains that its business model is fundamentally different. The company insists it operates under the oversight of the Commodity Futures Trading Commission (CFTC), not state-level gaming regulators.
Kalshi's founder, Tarek Mansour, has expressed minimal concern over the cease-and-desist orders issued by Maryland and four other states. He maintains that the company's products are legitimate financial instruments and not subject to state gambling laws.
Despite the mounting legal challenges, Kalshi has taken an assertive stance. The company has filed lawsuits against both Nevada and New Jersey, aiming to assert its right to offer sports-event outcome contracts across all 50 states.
Kalshi's leadership continues to argue that the regulatory framework established by the CFTC should take precedence over individual state gambling laws. It has reiterated on several occasions that the platform is designed for speculation on public events rather than entertainment-driven betting.
While Robinhood and Crypto.com have not issued public statements in response to Maryland's directive, their inclusion in the cease-and-desist action suggests that regulators view their services as operating in a similar legal gray area.
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