Maryland officials warn that sports prediction markets could jeopardize the good standing of their gaming licenses, and they have advised sportsbooks and fantasy sports operators to stay away from them.
Licensed sports betting and fantasy sports providers were informed this week by the Maryland Lottery and Gaming Control Commission that it believes that prediction markets that offer contracts related to sports are a "illegal activity" in the Old Line State. The licenses of authorized sportsbooks, fantasy sports, and/or gambling establishments may be canceled if they engage in such unlawful activity.
"All Maryland licensees and operators are reminded that any ‘illegal activity,’ in any jurisdiction, may bear negatively on your qualifications for a Commission-issued license, registration, or certification in Maryland,” the state gaming regulator wrote its sportsbook and fantasy sports partners. “Accordingly, any direct or indirect association, for any financial gain, with any unlicensed person that allows individuals to buy, sell, or trade sporting event contracts … is an ‘illegal activity.'”
Online daily fantasy sports (DFS) and sports gambling, both in-person and online, are legal in Maryland.
Leaders in Sportsbooks at Risk
FanDuel and DraftKings, the two leading companies in the market, are among Maryland's mobile sportsbook operators. Other well-known online sportsbooks in Maryland include Caesars Sportsbook, BetMGM, BetRivers, and Fanatics.
The US Commodity Futures Trading Commission's Designated Contract Market (DCM) licenses, which are used by organizations operating under federal supervision, are the subject of the state's warning regarding sports prediction markets.
In order to provide sports event contracts in areas like California and Texas where sports betting is prohibited, a number of Maryland's regulated sportsbooks have partnered with DCM-licensed prediction markets in recent weeks.
FanDuel teamed up with CME Group for FanDuel Predicts, DraftKings joined with Railbird Exchange for DraftKings Predicts, while Fanatics made an agreement with Crypto.com. Through these arrangements, sportsbooks with existing DCM permits will be able to enter sports prediction markets more quickly.
The future of those three sportsbook licenses is called into question by Maryland's warning.
“The Commission hereby notifies that any involvement in the offering of sporting event contracts, directly or via an affiliate, key person, related business entity, or other association, on a DCM without a valid Maryland sports wagering license may have implications to your licensure if done so contrary to regulatory requirements for a sports wagering the license,” the Maryland Lottery and Gaming Control Commission letter continued. “The Commission expects any licensee that is actively pursuing any involvement with an exchange or DCM that is regulated by the CFTC to provide prompt notice to the Commission.”
Crackdown Nationwide
The Supremacy Clause of the US Constitution gives prediction markets like Kalshi, Polymarket, Crypto.com, Sportrade, and ProphetX the impression that the law is on their side. The administration of President Donald Trump is probably in favor of the new "financial" markets, even if Maryland casino authorities are joining those in Massachusetts, Michigan, Nevada, New York, Ohio, and Pennsylvania in raising concerns about sports prediction markets.
Trump Media is investigating its own entry into prediction markets, and Donald Trump Jr. serves as an advisor to Kalshi and Polymarket. Michael Selig, a close Trump ally who is expected to take over as head of the CFTC, is well-known for supporting a regulatory climate that is favorable to cryptocurrencies.