The company asked a judge to stop Maryland from blocking its sports markets. In response, the Maryland Lottery and Gaming Control Commission (MLGCC) filed papers to fight Kalshi’s request. The case will decide who has the power to regulate these kinds of bets in Maryland.
Background on Kalshi’s Motion
Kalshi runs a prediction market under rules set by the federal Commodity Futures Trading Commission (CFTC). It calls its bets “event contracts” and says only the CFTC can control them.
In April, Kalshi asked a federal court for a preliminary injunction. This would let Kalshi keep its sports markets live while the case goes on. The company used the same argument it made in Nevada and New Jersey. It says the state laws for sports betting do not apply because federal law should override them.
Kalshi’s lawyers wrote that the Commodity Exchange Act gives the CFTC “exclusive jurisdiction” over any contract on a designated contract market. They claim the state’s rules for retail Maryland sportsbooks do not cover their online platform.
In other words, Kalshi argues it only answers to a federal agency and not to state gambling laws. The company believes this lets it keep operating even if Maryland issues a cease-and-desist order against it.
The Maryland Lottery and Gaming Control Commission filed its opposition on May 9, 2025. The MLGCC said Kalshi’s view is wrong. It pointed out that Kalshi’s bets focus only on game outcomes, not on any real economic risk tied to sports events.
Maryland lawyers noted that true “swaps” under the CFTC must connect to a larger financial or commercial effect. They argued that Kalshi’s markets are simple wagers, much like betting on a game at a sportsbook.
Maryland’s Opposition and Next Steps
In its brief, Maryland drew a clear line between betting on event outcomes and real financial swaps. The state said Kalshi’s contracts are just bets on who wins a game. They do not offer any way to hedge against financial losses in the sports industry.
Therefore, Maryland said that these bets should fall under the same rules that apply to local sportsbooks. The state also noted that Kalshi’s own term “event contract” does not appear in the law that gives the CFTC power over swaps.
Maryland’s brief also pointed to a special CFTC rule that bans contracts linked to unlawful activities or that go against public interest. The state argued that sports betting without following local rules could harm the public.
The brief even used strong language, calling Kalshi’s complaints “crocodile tears” and saying the company brought the problem on itself by self-certifying its platform under a rule that clearly did not fit.
The federal judge will hear arguments in late May or early June 2025. If the court agrees with Kalshi, its sports markets could stay open until the full case is decided. If Maryland wins, Kalshi would have to pause its operations in the state right away. A decision here could also affect similar cases in other states.
Maryland’s stand shows how states can push back on federal preemption claims. The outcome will matter to other states that want to control sports betting and to companies like Kalshi that seek to offer new kinds of online wagers. For now, Maryland’s gaming board is ready to defend its rules and keep Maryland sports betting markets regulated under state law.
