Business Gambling Maryland fights Kalshi sports contracts in court Share this: Share on Facebook (Opens in new window) Facebook Share on X (Opens in new window) X By Jeff Barker PUBLISHED: May 7, 2026 at 5:56 PM EDT | UPDATED: May 7, 2026 at 11:40 PM EDT Getting your Trinity Audio player ready... Maryland urged a federal court Thursday to allow it to block sports-event contracts offered by Kalshi, arguing the company’s prediction market products are effectively sports bets. At issue is Maryland’s ability to prevent Kalshi, a New York City-based prediction market operator, from offering sports-event contracts in the state, including those tied to game outcomes. For example, Kalshi was offering yes-or-no contracts on Thursday tied to the outcome of the Orioles game against the Miami Marlins. It also offered contracts on whether the Ravens would win their division in the upcoming NFL season. It’s not known when the court will rule, but one judge on the panel offered a colorful comparison during Thursday’s hearing. “If it quacks, you know, it’s a duck, right? It’s gambling,” Judge Roger Gregory said during oral arguments before the 4th U.S. Circuit Court of Appeals in Richmond, Va. “Derivatives and all that, but it’s gambling.” The state says the case is an important test of its ability to protect Maryland consumers. If Kalshi wins, the company would continue to offer sports contracts without state oversight. In addition, Kalshi does not pay the taxes required of licensed Maryland sports betting operators, who contributed $89 million to the state in fiscal 2025. Max Brauer, a Maryland assistant attorney general, argued before a three-judge panel that Kalshi is essentially offering rogue sports bets since the company is not a state-licensed sportsbook. “Maryland’s sports wagering statute quite clearly regulates sports wagering. The Commodity Exchange Act does not. These are different domains,” Brauer said. The CEA governs U.S. derivatives markets, which are financial exchanges in which people trade contracts tied to the future value or outcome of an asset or event. Those could include oil prices, interest rates, crops, elections, or — Kalshi says — sports events. The case comes down to a federal vs. state question. Kalshi argued Thursday that federal law pre-empts Maryland’s gambling laws, and that states have created a confusing patchwork of rules. Other states, too, are in conflict with prediction market companies, and, in some cases, the federal government. In April, the Trump administration sued Arizona, Connecticut and Illinois, saying the federal government has a “clear and longstanding exclusive jurisdiction to regulate event contracts.” The cases are pending. “The problem with the scheme that sort of has arisen in the past year is that we now have 50 different state regulators claiming that we have to comply with 50 different sets of state laws,” Kalshi attorney Will Havemann told the court. “And that is clearly not what Congress intended in the Commodity Exchange Act.” Kalshi says its sports offerings differ from wagers because its customers aren’t betting against the house. Kalshi makes money by taking a trading fee from people on the “yes” and “no” sides of a contract. “On a sports book, they are an adversarial party to all of the users,” Kalshi spokesperson Jack Such told The Baltimore Sun in a recent interview. “In this model, we don’t care if you win or lose because you’re not winning money from us.” But the state argues that some of Kalshi’s offerings are practically indistinguishable from sports wagers, minus the state’s consumer protections. Maryland sports bettors must be 21 and older, while Kalshi allows users as young as 18 to trade. Related Articles Maryland Lottery reports $1 million Powerball, scratch-off wins in Fallston, Manchester Churchill Downs considers Ocean Downs sale after Maryland Preakness deal $1M Powerball ticket sold at Odenton Royal Farms The case began after Maryland’s cease-and-desist order last year blocking the company from offering any product “that provides an investing opportunity based on predicting the outcome of any sporting league play or any sporting event.” Kalshi filed suit in U.S. District Court in Baltimore last May, arguing that its offerings weren’t sports bets and should be regulated exclusively not by Maryland gaming regulators but by the federal Commodity Futures Trading Commission. On Aug. 1, U.S. District Judge Adam Abelson refused Kalshi’s request to block Maryland’s restrictions, saying it had the same right as other companies to seek a sports betting license. Kalshi has appealed to the Richmond-based court and has continued operating in Maryland while the case is heard. 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