Maryland Warns Licensed Operators Over Growing Use of Prediction Markets

Maryland Sets a Firm Boundary

The Maryland Lottery and Gaming Control Commission issued a formal notice on 20 November addressed to casinos, online sportsbooks and daily fantasy sports operators. The regulator stated that offering sporting event contracts through a designated contract market without a Maryland sports wagering licence is considered illegal sports wagering under state law.

The commission also made clear that the location of the activity does not matter. Participation in prediction markets anywhere in the United States may be taken into account when assessing the suitability of a company to hold a Maryland licence. According to the notice, any direct or indirect involvement that is intended to generate revenue will be treated as illegal activity.

This creates a demanding compliance challenge for companies exploring prediction market opportunities while trying to maintain approval in Maryland.

Notice Arrives as Operators Prepare New Products

The warning comes at a time when several major US operators are preparing to launch prediction market offerings. FanDuel is planning a December debut through a partnership with CME. DraftKings expects to enter the sector through Railbird, a platform licensed by the CFTC. Fanatics is moving in the same direction, with Michael Rubin confirming that the company intends to introduce a similar product next month in partnership with Crypto.com.

These moves reflect a broader industry belief that prediction markets could become a valuable addition to the US sports wagering ecosystem. At the same time operators must navigate an environment in which gambling regulators, commodities regulators and individual states interpret sporting event contracts differently.

DFS Platforms Face Additional Scrutiny

Maryland’s announcement also applies to daily fantasy sports operators. That distinguishes it from several other state advisories and puts additional pressure on platforms that have been experimenting with prediction market features. Underdog, which holds a Maryland licence, offers such products in other jurisdictions. PrizePicks launched a product with Kalshi on 14 November but does not appear on Maryland’s list of approved DFS operators.

The state has already confronted Kalshi directly. Maryland ordered the platform to cease operating. Under a court agreement, Kalshi continues to operate while awaiting a ruling from the Fourth Circuit.

A Growing National Trend

Maryland joins a list of states that have issued regulatory letters related to prediction markets, including Arizona, Illinois, Massachusetts, Michigan, Nevada and Ohio. None of those states has imposed fines or revoked licences. In Nevada, the Gaming Control Board noted that FanDuel surrendered its licence and DraftKings withdrew inactive applications. These decisions removed both companies from the state’s review process.

New York regulators have also indicated that they are prepared to examine whether licensed operators hold the proper authorisation to offer sporting event contracts in every relevant jurisdiction.

Prediction markets continue to expand despite the growing number of compliance warnings. Maryland’s intervention adds weight to a broader regulatory push, yet the sector shows no sign of slowing down on a national scale.