Maryland Warns Sports Betting Operators to Not Engage in Sports Event Contracts

• The Maryland Lottery and Gaming Control Commission has officially warned licensed operators to not engage in sports event contracts
• The commission has determined offering sports event contracts in the state is an “illegal activity”
• Any involvement with sports event contracts may have implications on continued licensure

Maryland is the latest state to send an official warning to its licensed sports betting operators to not engage in prediction markets.

The Maryland Lottery and Gaming Control Commission sent warning letters to the state’s 12 licensed online sports betting operators to not offer sports event contracts or partner with those who do.

“All Maryland licensees and operators are reminded that any ‘illegal activity,’ in any jurisdiction, may bear negatively on your qualifications for a commission-issued license, registration, or certification in Maryland. Accordingly, any direct or indirect association, for any financial gain, with any unlicensed person that allows individuals to buy, sell, or trade sporting event contracts on a DCM is an ‘illegal activity.’ This is also true for engaging in the described activity in any other jurisdiction where this activity have been declared illegal, or is unauthorized in that jurisdiction,” John Martin, secretary of the Maryland Lottery and Gaming Control Commission, wrote in the letters.

Do Not Engage, Do Not Offer Contracts

Maryland gaming regulators are the latest to warn licensed operators to not offer sports event contracts or engage with designated contract markets (DCM) who do. The commission warns operators that any engagement with sports event contracts “may have implications to your licensure if done so contrary to regulatory requirements for a sports wagering licensee.”

“As the commission fulfills its statutory duty to monitor and evaluate each licensee’s continued qualifications for licensure, it may consider whether the licensee and its affiliates, key persons, related business entities, and any other associates are properly licensed to offer sporting event contracts in Maryland and other jurisdictions,” the letters note.

Maryland joins a growing list of states taking the same tactic with their licensed operators. The Massachusetts Gaming Commission earlier this month clearly warned operators that offering sports event contracts in state is prohibited and may result in action against the company.

Both the Michigan Gaming Control Board and Ohio Casino Control Commission have warned their license holders to not engage in the markets. The board sent letters to licensed operators earlier this month warning them that any participation in the market would play into the board’s decision for future licensure in the state.

The Ohio Casino Control Commission sent similar letters to its operators, which led prediction market company Kalshi to file a lawsuit against the commission and the Ohio Attorney General. Arizona and Nevada regulatory gaming bodies have also sent similar letters to gaming operators.

The warnings come at the same time that three of the country’s largest sports betting companies have announced plans to begin offering sports event contracts to customers.

DraftKings, FanDuel, Fanatics All Plan to Offer Contracts

DraftKings, FanDuel, and Fanatics have all announced plans to begin offering sports event contracts to customers prior to the end of the year.

Yesterday, Fanatics CEO Michael Rubin announced the company will be launching a predictions market product in partnership with Crypto.com “in the next couple weeks.” Rubin made the announcement today during an interview with Sara Eisen on CNBC’s Money Movers. The launch will likely come before the conclusion of 2025.

Rubin implied the company will not offer prediction market contracts in states where Fanatics is licensed to offer sports betting.

DraftKings Predictions will launch “in the coming months” as a standalone app. In late October, DraftKings acquired Railbird Technologies Inc, a federally licensed exchange designated by the Commodity Futures Trading Commission (CFTC), to enter the predictions market.

FanDuel’s own prediction market service, FanDuel Predicts, will be launched in December as a standalone app.

Both companies have announced they will be including sports event contracts in their offerings, but will not do so in states where sports betting is legal. Both also announced they will withdraw from the American Gaming Association due to their decision to offer sports event contracts.