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Prediction market sector questioning Maryland's impartiality after the agency allegedly relied on the template letter prepared by the American Gaming Association to try and keep Kalshi out
A spokesperson for the MLGCA insists they were acting independently when it comes to their stance against prediction markets
Maryland gambling regulators are being scrutinized over their relationship with the American Gaming Association (AGA) in an effort to keep prediction markets out of that state.
Prediction markets like Kalshi and Polymarket argue that they are not gambling but instead their platform offers event contracts. Once we get past any semantics, there is no getting beyond the current fact that both companies are licensed and regulated by Commodity Futures Trading Commission (CFTC), a federal agency.
The American Gaming Association (AGA) is not a regulator. It is a trade association that represents the interests of the U.S. commercial casino gaming industry.
News surfaced in recent days of a letter template provided by the AGA in April of last year that Maryland’s gaming regulator (MLGCA) used to write and urge the CFTC to ban sports event contracts. This information was reportedly obtained through a public records request.
Days after the MLGCA received the AGA template letter, Kalshi was sent a cease and desist letter from the state regulator.
Proponents of prediction markets have questioned the MLGCA's impartiality after the agency allegedly relied on the template letter prepared by the AGA.
At issue is not so much that the AGA provided a template letter. That, by itself, is common and legal. Trade associations, nonprofits, advocacy groups, and businesses routinely provide draft letters, suggested language, and model legislation to policymakers and regulators.
The concern arises if the regulator appears to have adopted the industry's position without exercising independent judgment.
“They (the MLGCA) are clearly taking their marching orders from the casino lobbyists,” Sean Patrick Maloney, president and CEO of the Coalition for Prediction Markets, said. “That’s not what the citizens of Maryland deserve. They deserve people doing the public’s work, not running errands for casino lobbyists.”
Maloney referred to the AGA template letter as a "smoking gun".
While the MLGCA may have used a template letter furnished by the American Gaming Association, a spokesperson for the agency insists it independently arrived at its position opposing sports event prediction markets.
Maryland has taken one of the strongest anti-prediction market positions in the country.
Following the MLGCA sending cease and desist letters to Kalshi, that prediction market sued. Maryland argued that states retain authority to regulate what they view as sports gambling occurring within their borders, even if the contracts are listed on a federally regulated exchange. A federal judge initially declined to block Maryland's enforcement efforts while the litigation proceeded.
In May 2026, Maryland Attorney General Anthony Brown joined a bipartisan coalition of 41 attorneys general urging the CFTC to reaffirm that sports-related prediction markets fall within state gambling jurisdiction. The coalition argued these products function as unregulated sportsbooks rather than traditional financial derivatives.
Because the AGA is advocating for its members' economic interests, critics may question whether a regulator should rely heavily on its language. Companies like Kalshi would likely argue that individual state regulators should develop their own position rather than relying on a lobbying group representing incumbent competitors.
Likewise, If the CFTC receives letters from multiple state regulators that are largely identical in nature having originated from the same template, this suggest a broad, independent consensus among regulators.
- Chris Costigan, Gambling911.com Publisher
