Commodity traders ordered to cease offering sports events contracts in Maryland
The Maryland Lottery and Gaming Control Commission has ordered three commodity trading firms to cease offering sports events contracts to state residents.
KalshiEX, Robinhood Derivatives, and North American Derivatives Exchange (which operates as Crypto.com) have received cease-and-desist letters from the Maryland Lottery and Gaming Control Commission informing them that their sports prediction markets are legally indistinguishable from regular sports betting.
Under Maryland state law, sports wagering is clearly defined and can only be offered by operators who hold a state license.
Licensed sports betting companies must also adhere to age and identity verification rules and employ geolocation technology to ensure players are based in Maryland. These rules, however, do not apply to commodities traders.
According to Maryland Lottery and Gaming Director John Martin, there are legal and consumer protection issues involved, and the operations of these traders have a fiscal impact on the state.
Martin said, “They’re conducting sports wagering without a license, and in doing so, they’re avoiding the collection of sports wagering taxes that legal operators pay to the state.”
Licensed sportsbooks in the state pay 15% of their revenue to the public education fund-raising body, the Blueprint for Maryland’s Future Fund.
Since the launch of legal sports betting in Maryland in December 2021, those contributions have totaled nearly US$150 million.
Charlotte Capewell brings her passion for storytelling and expertise in writing, researching, and the gambling industry to every article she writes. Her specialties include the US gambling industry, regulator legislation, igaming, and more.
