Maryland’s gambling regulator issued a formal warning to licensed gambling operators yesterday (20 November), saying involvement with prediction markets could jeopardise their regulatory standing in the state.
The Maryland Lottery and Gaming Control Commission (MLGCC) targeted casinos, online sportsbooks, and daily fantasy sports (DFS) operators with its announcement.
It warned that offering sporting event contracts through a designated contract market without a Maryland sports wagering licence constitutes illegal sports wagering under state law.
The letter added that participation in prediction markets anywhere in the US could affect a company’s Maryland licence.
The commission noted that any direct or indirect involvement intended to generate revenue would be treated as illegal activity.
Regulators emphasised that they will evaluate whether operators, as well as their affiliates, executives, and related business entities, are properly licensed to offer sporting event contracts both in Maryland and in other jurisdictions.
This creates a compliance burden for companies seeking to expand into prediction markets while retaining approval in Maryland.
The timing of the notice coincides with major US sportsbooks preparing to introduce prediction market products.
FanDuel plans a December launch through a partnership with CME, while DraftKings expects to enter the space using the CFTC-licenced Railbird platform.
Elsewhere, Fanatics CEO Michael Rubin has indicated that his company will debut a similar product next month in partnership with Crypto.com.
The national movement toward regulated prediction markets has created a conundrum for operators that must satisfy both gambling regulators and commodities regulators while navigating differing state interpretations of sporting event contracts.
Maryland’s warning also extended to DFS providers, distinguishing it from several previous state advisories.
Underdog, which is licensed in Maryland, already offers prediction markets in other jurisdictions. PrizePicks, which introduced a product with Kalshi on 14 November, is not listed among Maryland’s approved DFS operators.
Maryland has already taken a firm stance on prediction markets, having previously ordered Kalshi to cease operating in the state. Under a court agreement, Kalshi remains active pending a Fourth Circuit ruling.
Similar regulatory letters have been issued in Arizona, Illinois, Massachusetts, Michigan, Nevada, and Ohio.
Thus far, no state has imposed fines or revoked licences.
According to the Nevada Gaming Control Board, FanDuel surrendered its Nevada licence and DraftKings withdrew inactive applications, decisions that removed both companies from that state’s review process.
New York regulators have also indicated they are prepared to examine whether their licensed operators maintain proper authorisation to offer sporting event contracts in all relevant jurisdictions.
Maryland is just the latest US jurisdiction to target prediction markets, but the growing scrutiny across multiple states has yet to slow the growth of the segment.
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