Maryland Fifth State To Send Cease-And-Desist Letters to Robinhood, Kalshi, And Crypto.com

Maryland has become the fifth state to send cease-and-desist letters to Kalshi, Robinhood, and Crypto.com as the Maryland Lottery and Gaming Control Commission has directed the companies to stop offering sport event contracts in the state.

Maryland joins Illinois, Ohio, Nevada, and New Jersey is seeking to ban the companies from offering what they believe amounts to de facto sports betting.

“We view this as a legal matter and a consumer protection matter, and there is also a fiscal interest for the State,” said Maryland Lottery and Gaming Director John Martin in a press release. “Each of Maryland’s legal sports wagering operators completed a rigorous licensing process and is subject to extensive regulations that include responsible gaming requirements. The commodity traders aren’t bound by those same guardrails. They’re conducting sports wagering without a license, and in doing so, they’re avoiding the collection of sports wagering taxes that legal operators pay to the State.”

Robinhood, Kalshi, and Crypto.com have been notified that their prediction markets directly violate Maryland’s gaming laws, which specifically define what constitutes sports wagering — namely, the outcome of a sporting event. State officials also noted that platforms offering wagers on sporting events must verify participants are at least 21 years old and physically located within state borders — requirements that commodity traders are not bound by.

Growing number

Before Maryland’s letters, Illinois was the most recent state to send the cease and desist letters to Kalshi, Robinhood, and Crypto.com.

Those letters, all dated April 1, followed the same playbook, spelling out what constitutes sports wagering the the state, claiming the sport event contracts are indeed sports betting, and that “no person or entity may engage in a sports wagering operation or activity in Illinois unless licensed by the IGB.” 

The Ohio Casino Control Commission sent similar letters to the three companies last Monday, and the Friday before that Kalshi filed lawsuits against gaming regulatory bodies in both Nevada and New Jersey after receiving cease-and-desist letters from those state gaming agencies.

New Jersey’s Division of Gaming Enforcement claims Kalshi and Robinhood are in violation of the state constitution that mandates “wagering shall not be permitted on a college sport or athletic event that takes place in New Jersey or sport or athletic event in which any New Jersey college team participates regardless of where the event takes place.”

Other states, notably Massachusetts and Michigan, are investigating the companies for similar reasons to the five states above. Additionally, Montana has sent a cease-and-desist letter to Kalshi.