Maryland's gambling authority investigates Kalshi

Summary

• Maryland Adds Itself to the List of States Targeting Kalshi and Other Prediction Markets
• The argument follows the familiar claim that Kalshi is providing a sports betting service without the necessary license.
• Kalshi has already faced similar accusations in six states.

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Maryland is the latest state, and possibly the sixth, to take legal action against Kalshi, the popular prediction market platform known for reshaping consumer expectations in politics and sports. Other states, including New Jersey, Nevada, Illinois, Ohio, and Montana, have also pursued actions against this and similar platforms.

Kalshi under more pressure as more states question its legitimacy

Kalshi, while not officially a gambling company and overseen by the US Commodity Futures Trading Commission (CFTC), has attracted considerable interest from traditional sports fans. These fans are flocking to the platform to make predictions, potentially impacting the revenue of traditional sportsbooks in the United States. This scenario is at the heart of the Maryland Lottery and Gaming Control Commission's (MLGCC) actions against the platform. The state gambling regulator has sent a cease-and-desist letter to Kalshi, along with Robinhood and Crypto.com, on Monday, April 7. The commission accuses these companies of engaging in activities that amount to sports event wagering. The MLGCC noted that none of the three companies hold the necessary license to offer such services legally. In response, the platforms have argued that their prediction markets are not equivalent to sports betting. The central issue is whether making a prediction is legally the same as placing a wager. There is overlap, with sports fans using these prediction platforms to make bets on events like college basketball. In an official statement on the regulator's website, MLGCC Agency Director John Martin stated:

Kalshi readies to push back against the argument that it offers "sports betting"

Martin reinforced his argument, claiming that prediction markets are similar to sports betting platforms. However, he noted that unlike sports betting, any authorized entity in the Old Line State undergoes a meticulous verification process. Martin emphasized that platforms like Kalshi fail to meet the tax requirements associated with offering

He made it clear that the regulator considers this issue a matter of and and is committed to taking further action. Martin concluded. In anticipation of such opposition, Kalshi is preparing to respond vigorously. They have recently appointed Sara Slane, a veteran of the American Gaming Association and a sports betting advocate, as Head of Corporate Development. Kalshi has previous experience challenging federal regulators like the CFTC, and it is currently engaged in disputes with the gambling authorities in Nevada and New Jersey.