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Maryland Joins Sports Event Contract Betting Clampdown
kathaleenrancl edited this page 1 week ago
And after that there were 6.
On Monday, Maryland ended up being the 6th state in the U.S. (that we know thus far) to send out cease-and-desist letters to federally controlled "prediction markets" using de facto sports wagering through occasion contracts.
- Officials in Maryland, Ohio, Illinois, New Jersey, Nevada, and Montana have sent out cease-and-desist letters in connection with federally managed sports occasion contracts.
- Those agreements are a growing type of competitors for state-regulated sportsbooks.
The letters were sent by the Maryland Lottery and Gaming Control Commission to Kalshi, Robinhood, and Crypto.com, all of which have gotten comparable correspondence from other state regulators.
"Kalshi is running in Maryland and is offering and conducting what is, in reality, betting on sporting occasions," Maryland Lottery and Gaming Control company director John Martin wrote in one of the letters. "However, Kalshi does not hold a sports wagering license issued by the Commission, its wagers have not been authorized by the Commission, and it is not otherwise authorized under Maryland law to provide wagers on sporting events."
For these reasons, Martin added, Kalshi and the others are being directed by the commission to "instantly cease and desist these legal offerings" in the state. The prediction markets have 15 days to inform the regulator that they are complying.
The letters from the Maryland sports betting regulator follow similar ones sent by authorities in Nevada, New Jersey, Ohio, Illinois, and, according to Kalshi CEO Tarek Mansour, .
Join the club
Those efforts represent increasing awareness of and opposition to federally regulated forecast markets like Kalshi. That opposition has ramped up since occasion agreement trading expanded to include sports results, like the Super Bowl and March Madness.
Sports event contracts are now offering users with the opportunity to make de facto wagers on numerous video games and leagues in all 50 U.S. states, not simply the ones that have actually legalized sports wagering. Therefore, they are a growing source of competition to state-regulated sportsbook operators like DraftKings and FanDuel.
Kalshi, for example, has helped with more than $380 million in trading in March Madness-related agreements, such as users purchasing "yes" agreements for Houston to win the men's college basketball championship.
Kalshi, Robinhood, and Crypto.com are also all regulated by the federal Commodity Futures Trading Commission (CFTC), not states.
In Nevada and New Jersey, where Kalshi is pressing back on the cease-and-desist letters, the company has actually argued it goes through federal law and oversight.
"We are actually like a financial exchange, but the underlying trading is events," Kalshi CEO Tarek Mansour stated in a recent TechCrunch interview. "The CFTC is our regulator. If the CFTC informs us to stop, we will definitely stop.