Maryland Warns Operators That Prediction Markets Could Jeopardize Licenses

Maryland's gambling regulator issued a warning to licensed operators on Thursday, becoming the eighth US jurisdiction to caution sportsbook and fantasy operators that involvement with prediction markets could threaten their standing in the state. 

In a letter sent to casinos, online sportsbooks, and daily fantasy sports (DFS) operators, the Maryland Lottery and Gaming Control Commission (MLGCC) stated it had determined that offering sporting event contracts on a designated contract market without a Maryland sports betting license constituted illegal sports wagering in the state. 

The commission said any participation in prediction markets "in any jurisdiction" could negatively affect a Maryland license and that direct or indirect involvement for financial gain would be treated as illegal activity.

The warning comes as FanDuel, DraftKings, and Fanatics prepare to launch prediction markets after securing partnerships or acquiring CFTC-licensed platforms. FanDuel plans a December rollout with CME, while DraftKings expects to launch in the coming months through Railbird. Additionally, Fanatics CEO Michael Rubin announced that his company will debut next month in partnership with Crypto.com. 

Unlike other states, Maryland's letter also included DFS operators. Underdog is licensed in Maryland and already offers prediction markets in other jurisdictions, while PrizePicks, which launched a prediction product with Kalshi on Nov. 14, is not on Maryland's list of approved DFS operators.

Maryland also continues to challenge prediction markets in court, following its earlier order to Kalshi to cease operating in the state this year. Both sides agreed that the platform could remain live pending a decision from the Fourth Circuit. 

Similar letters have been sent to operators in the Arizona sports betting, Illinois sports betting, Massachusetts sports betting, Michigan sports betting, Nevada sports betting, and Ohio sports betting markets, though no state has issued fines or revoked licenses.

FanDuel surrendered its Nevada license and DraftKings withdrew inactive applications, according to the Nevada Gaming Control Board.

New York raises similar questions about licensee conduct

The debate over prediction markets expanded this week as the Chair of the New York State Gaming Commission (NYSGC) signaled that operators offering event contracts may face heightened scrutiny. At the commission's Nov. 18 meeting, Chair Brian O'Dwyer said prediction markets posed a direct risk to regulatory oversight and the broader gaming industry. 

Two major New York sports betting licensees have already announced plans to begin offering sports prediction markets, while two fantasy operators are providing contracts through partnerships with Crypto.com and Kalshi.

O'Dwyer told commissioners it was appropriate to determine whether any licensee involved in prediction markets should continue to hold approval. He said staff would review the issue and present recommendations. While New York has not issued a statewide warning letter, O'Dwyer emphasized that licensees must maintain unblemished character and full fitness to operate.

The commission previously issued a cease-and-desist letter to Kalshi in late October, prompting an ongoing court dispute. O'Dwyer indicated further action against prediction market participants was likely. 

His remarks followed the filing of a New York Assembly bill that seeks to prohibit prediction market platforms from offering markets on athletic events and similar subjects.