On line casino lobbyists wrote Maryland gaming regulators’ letter to feds

MARYLAND (WBFF) — Maryland gaming regulators urged federal officers final 12 months to crack down on sports activities prediction markets utilizing a letter drafted by on line casino lobbyists, in keeping with public data obtained by Spotlight on Maryland.

The data increase questions concerning the independence of the Maryland Lottery and Gaming Control Agency, which is liable for regulating the state’s playing trade however relied on language written by the trade’s chief lobbying group earlier than sending an official coverage place to federal regulators.

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Documents obtained by a public data request present the American Gaming Association (AGA), which represents industrial casinos, offered Maryland officers with a pattern letter urging the Commodity Futures Trading Commission (CFTC) to ban sports-related occasion contracts provided by corporations together with Kalshi and Polymarket.

Eight days later, in April 2025, the Maryland company despatched a letter to the CFTC that matched the AGA draft’s substance phrase for phrase, with solely state-specific language added.

Sports occasion contracts, similar to these with Kalshi and Polymarket, are actually buying and selling on markets overseen by the CFTC, which, for instance, enable individuals to put cash on whether or not Team USA will win its subsequent World Cup sport.

The dispute is a part of a rising nationwide battle over whether or not sports activities occasion contracts ought to be regulated as federally overseen monetary merchandise or as sports activities betting topic to state playing legal guidelines.

Sean Patrick Maloney, president and CEO of the Coalition for Prediction Markets, which lobbies on behalf of corporations similar to Kalshi, described the Maryland letter as a “smoking gun.”

“This is a great example of the fox guarding the henhouse. If you’ve got casino lobbyists writing the official talking points and letters of Maryland state gaming officials, well, they clearly have no independence,” Maloney, a former Democratic congressman from New York, advised Spotlight on Maryland. “You’ve got a smoking gun. They’re clearly taking their marching orders from the casino lobbyists. That’s not what the citizens of Maryland deserve. They deserve people doing the public’s work, not running errands for casino lobbyists.”

Documents reviewed by Spotlight on Maryland present that John Martin, the director of the Maryland Lottery and Gaming Control Agency, emailed colleagues on April 22, 2025, noting “possible action” by a “sample letter to be emailed to the CFTC Commissioners,” which he specified was “provided by the American Gaming Association (AGA).”

John Holden, a professor of enterprise legislation at Indiana University who focuses on sports activities betting regulation, mentioned commerce associations like AGA usually draft letters and speaking factors for presidency officers. He mentioned the broader difficulty of sports activities occasion contracts has created a sophisticated authorized battle over who ought to regulate them— a dispute he mentioned may finally attain the U.S. Supreme Court and can also require motion from Congress.

“Right now, we’re in a pretty complex time because really no one knows who should be making the move here,” Holden advised Spotlight on Maryland. “We have conflicting court decisions all around the country basically saying that the CFTC should have exclusive jurisdiction versus some courts saying that the states should have jurisdiction. And what you end up with is this whole mess of competing jurisdictions with competing interpretations as to who has control here.”

Maryland Attorney General Anthony Brown joined a bipartisan coalition of 41 attorneys basic in May 2026, urging the CFTC to acknowledge state authority over sports-related occasion contracts.

Holden mentioned the speedy growth of authorized sports activities betting within the United States created a system the place state regulators work carefully with the on line casino trade they’re tasked with overseeing.

“I think there is a complex relationship between state regulators and the gaming industry,” Holden mentioned. “The way that sports betting came about fairly rapidly in this country meant that there was not a lot of expertise. I think that there should be a push for more independence, as expertise on regulation is building that wasn’t there in the past.”

When requested concerning the AGA-drafted letter, a spokesperson for the Maryland Lottery and Gaming Control Agency mentioned the company acts “independently.”

“Maryland Lottery and Gaming independently evaluated this issue and determined its stance based on what is in the State’s best interests,” the company’s spokesman emailed Spotlight on Maryland. “On April 7, 2025, the Agency sent cease-and-desist letters to Kalshi, North American Derivatives (doing business as Crypto.com) and Robinhood regarding their sports prediction markets.”

A spokesman for AGA defended the coverage place within the letter however didn’t dispute that the draft was offered to Maryland officers earlier than the company despatched it to the CFTC.

“Members of the legal gaming industry create good Maryland jobs, promote responsible gaming, and follow state laws. The so-called ‘prediction markets’ are evading state laws and siphoning significant potential tax revenue funding away from important civic programs in Maryland,” AGA’s spokesman wrote in an e mail to Spotlight on Maryland. “Our message to everyone is straightforward: Congress intended for sports betting to be regulated at the state and tribal level, and the referenced letter is about defending existing Maryland law for the benefit of all Marylanders.

“It’s understandable that ‘prediction markets’ don’t think it’s appropriate for people to note that ‘prediction markets’ offering sports gambling are ignoring Maryland law, siphoning tax revenue, and refusing to adhere to responsible gaming best practices that protect consumers,” the AGA spokesman continued.

The AGA estimates that sports activities occasion contracts on prediction markets have value states greater than $1 billion in tax income.

Maloney rejected the AGA’s argument, noting that prediction markets function otherwise from casinos and sportsbooks.

“What’s different is that the casino has a business model where it wins when you lose,” Maloney mentioned. “A sportsbook will kick you off if you win too much. An exchange has no such incentive. It just takes a small fee, and two equally situated counterparties can trade. That’s why consumers prefer prediction markets.”

Maryland raised about $125 million in state income by taxes on sports activities betting in fiscal 12 months 2026, which was a 56.5% enhance from the prior 12 months, in keeping with knowledge revealed by the Maryland Lottery and Gaming Agency.

Maloney mentioned Maryland regulators ought to dismiss the cries of on line casino lobbyists and let the CFTC proceed monitoring sports-related contracts.

“It’s hard to be independent because in this case, they’ve clearly failed to be,” he mentioned of Maryland gaming regulators. “They should let the federal government be the effective cop on the beat for national financial markets, as we have seen in the futures markets.”

Spotlight on Maryland is a three way partnership by The Baltimore Sun, FOX45 News and WJLA in Washington, D.C. Have a information tip? Call 410-467-4670 or e [email protected]. Contact Patrick Hauf [email protected] @PatrickHauf on X.