Maryland has become the latest state to issue a warning to gambling operators about their involvement in prediction markets. The Maryland Lottery and Gaming Control Commission sent a notice to casinos, online sportsbooks, and daily fantasy sports companies, reminding them that offering sporting event contracts without a proper Maryland sports wagering licence is considered illegal under state law.

The commission said that any company involved in prediction markets in the United States could risk losing its Maryland licence. This puts pressure on operators that want to try new prediction market products but still need to follow Maryland’s rules.

What the Commission Highlighted

In its letter, the commission explained that any direct or indirect effort to make money from prediction markets could be treated as illegal activity. It also said regulators will look at whether operators, their business partners, their executives, and any related companies are fully licensed to offer sporting event contracts inside Maryland and in other states.

This creates a heavy compliance burden for companies that want to expand into the fast growing prediction market industry. Operators will now have to make sure they meet rules from gambling regulators and commodities regulators while also dealing with different interpretations of sporting event contracts across the country.

The warning also stood out because it included daily fantasy sports providers. This is something several earlier state notices did not do. Underdog, which is licensed in Maryland, already offers prediction markets in other states. PrizePicks recently launched a product with Kalshi but is not on Maryland’s list of approved fantasy operators.

Growing Tension as Sportsbooks Enter Prediction Markets

Maryland’s notice comes at a time when major sportsbooks are preparing to launch prediction market products. FanDuel is planning a December release through a partnership with CME. DraftKings expects to join the market using the Railbird platform, which is licensed by the Commodity Futures Trading Commission. Fanatics CEO Michael Rubin has also said his company will introduce a similar product next month in partnership with Crypto dot com.

Maryland has already taken a strong position on prediction markets. It previously ordered Kalshi to stop operating in the state. Under a court agreement, Kalshi is still active while waiting for a decision from the Fourth Circuit Court of Appeals.

Other States Are Watching Closely

Maryland is not alone. Arizona, Illinois, Massachusetts, Michigan, Nevada, and Ohio have all sent similar letters. So far, no state has issued fines or revoked licences. In Nevada, FanDuel gave up its licence and DraftKings withdrew applications, removing operators from review.

New York regulators have also said they may check whether licensed operators are properly authorised in every state where they offer sporting event contracts. Even with all this scrutiny, the prediction market industry continues to grow nationwide.