Maryland has joined five other states in sending cease-and-desist letters to federally regulated prediction markets like Kalshi, which offer de facto sports wagering through event contracts. The Maryland Lottery and Gaming Control Commission directed Kalshi, Robinhood, and Crypto.com to immediately cease offering wagers on sporting events as they do not hold sports wagering licenses issued by the Commission. These efforts are part of a growing trend of opposition to federally regulated prediction markets seen in states like Nevada, New Jersey, Ohio, Illinois, and Montana. The rise in popularity of sports event contracts, which allow users to make bets on various games and leagues, poses a challenge to state-regulated sportsbooks like DraftKings and FanDuel.
Kalshi, Robinhood, and Crypto.com are all regulated by the federal Commodity Futures Trading Commission, not individual states. In response to the cease-and-desist letters, Kalshi has argued that it is subject to federal law and oversight and will comply if instructed by the CFTC to stop. The company has facilitated over $380 million in trading related to March Madness contracts, indicating the growing popularity and influence of prediction markets in the sports wagering industry. As states increasingly crack down on federally regulated prediction markets, the future of these platforms and their impact on the sports betting landscape remains uncertain.
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