Prediction markets platform Kalshi files lawsuit in Maryland
Prediction markets operator Kalshi has filed a lawsuit against the Maryland Lottery and Gaming Control Commission in response to a cease-and-desist letter ordering the company to stop operating in the state.
The New York-based company’s lawsuit argues that the Maryland Lottery and Gaming Control Commission’s decision violates federal law. It has also requested a hearing for a preliminary injunction against the regulator’s actions.
Kalshi is one of several companies offering sports event contracts. While technically similar to sports betting, these contracts are not regulated by the rules that govern sportsbooks.
The companies are also not required to pay any tax to state authorities. Maryland is one of several states that have taken action against Kalshi and other operators in recent weeks.
Kalshi argues that its sports events contracts are peer-to-peer swaps, not a form of sports betting, and so are regulated by the Commodity Futures Trading Commission, not state gambling authorities.
The lawsuit reads, “Maryland’s attempt to regulate Kalshi intrudes upon the federal regulatory framework that Congress established for regulating futures derivatives on designated exchanges. Maryland law is both field-preempted and conflict-preempted. This Court should therefore issue both a preliminary and a permanent injunction, as well as declaratory relief to that effect.”
The company recently won a temporary injunction against the Nevada Gaming Control Board, which a District Court judge said would clarify the legality of the model further.
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.
