- Maryland gaming regulators are taking steps to prohibit sports event contracts
- Cease-and-desist notices have been sent to Kalshi, Robinhood, and Crypto.com
- Maryland is the sixth state to send cease-and-desist notices for sports event contracts
Maryland is the latest state to take issue with sports event contracts.
The Maryland Lottery and Gaming Control Commission (MLGCC) today issued cease-and-desist letters to Kalshi, Robinhood, and Crypto.com, ordering the commodity trading businesses to stop offering sports event contracts in the Old Line State.
Maryland is the sixth state to prohibit the markets.
Indistinguishable From Sports Betting
The MLGCC informed the companies their sports event contracts were “indistinguishable from sports wagering” as they are based on the outcomes of sports events.
“We view this as a legal matter and a consumer protection matter, and there is also a fiscal interest for the state,” said Maryland Lottery and Gaming Director John Martin. “Each of Maryland’s legal sports wagering operators completed a rigorous licensing process and is subject to extensive regulations that include responsible gaming requirements. The commodity traders aren’t bound by those same guardrails. They’re conducting sports wagering without a license, and in doing so, they’re avoiding the collection of sports wagering taxes that legal operators pay to the state.”
Under Maryland law, a gaming activity is illegal unless it is expressly authorized. The only legally allowable sports betting in Maryland is from properly licensed sportsbook and fantasy operators in the state. No other form of real-money online gaming or wagering operates legally in the state, according to the MLGCC.
Properly licensed sports betting operators have contributed more than $61.2 million in tax revenues through the first eight months of FY 2025.
“The Kalshi Contracts ‘ relate to American sports leagues,’ and are purchased based on a prediction or belief that a specific outcome will occur; i.e., that a certain team will win a certain game, title, etc. The outcome of a sporting event is the basis for determining whether payment will be made to the purchasers of the contract. For this reason, the purchase of the contract is indistinguishable from the act of placing a sports wager,” Martin wrote in the cease-and-desist letter to Kalshi.
The MLGCC is directing the companies to comply with their request within 15 days of receiving the notice.
Latest State to Take Action
Illinois, New Jersey, Ohio, Montana and Nevada have all sent cease-and-desist orders for the markets. Both Illinois and Ohio sent notices to Kalshi, Robinhood, and Crypto.com, while New Jersey and Nevada only sent orders to Kalshi and Robinhood.
In response to the notices, KalshiEX filed lawsuits against both the New Jersey Division of Gaming Enforcement (NJ DGE) and Nevada Gaming Control Board (NGCB).
The company believes neither of the state regulatory bodies have the right to intrude on the government’s “exclusive” authority to regulate prediction markets.
Michigan and Connecticut have also confirmed they are investigating the sports event contract markets, but neither state have yet to take any official action.
In a move to protect consumers and ensure fair business practices, Maryland regulators have recently enforced stricter regulations on sports event contracts. These new regulations aim to prevent deceptive practices and provide greater transparency in the industry.
One of the key changes in the regulations is the requirement for sports event organizers to clearly outline all terms and conditions in their contracts. This includes details such as ticket prices, refund policies, and any additional fees that may be incurred. By providing this information upfront, consumers can make more informed decisions before purchasing tickets to sporting events.
Additionally, the regulations now require sports event organizers to adhere to certain standards of conduct when selling tickets. This includes prohibiting the use of misleading advertising or sales tactics that could deceive consumers. By enforcing these standards, regulators hope to protect consumers from falling victim to fraudulent practices in the sports event industry.
Another important aspect of the new regulations is the requirement for sports event organizers to provide consumers with a clear and accessible way to file complaints or seek refunds. This ensures that consumers have a way to address any issues they may encounter with their tickets or the event itself.
Overall, these stricter regulations on sports event contracts in Maryland are a positive step towards ensuring fair and transparent practices in the industry. By holding organizers accountable for their actions and providing consumers with greater protection, regulators are working to create a more trustworthy and reliable marketplace for sports events in the state.
