Casino Lobbyists Help Draft Maryland Letter to Federal Regulators
Maryland’s gaming agency sent a letter to the Commodity Futures Trading Commission (CFTC) last year that pushed for a ban on sports‑prediction markets.
The agency’s own records show the letter was almost identical to a draft supplied by the American Gaming Association (AGA), the lobby group for commercial casinos. The AGA’s version called on federal officials to stop companies like Kalshi and Polymarket from offering contracts that let people bet on sporting outcomes.
- The agency’s director emailed staff in late April 2025, noting that a “sample letter” from the AGA was ready for use.
- The final letter sent to the CFTC only added state‑specific details, leaving the main arguments unchanged.
- This raises questions about how independent Maryland’s gambling regulators really are.
National Context
| Side | Position |
|---|---|
| Some states | Treat sports‑event contracts like traditional betting and regulate them under state law. |
| Others (backed by the CFTC) | View them as financial products under federal oversight. |
The legal battle has already reached several courts and could potentially involve the Supreme Court or Congress.
Key Voices
- Sean Patrick Maloney (Coalition for Prediction Markets)
“The letter is a smoking gun that shows casino lobbyists are directing state regulators.”
He says it undermines public trust and suggests officials prioritize casino interests over consumer protection.
- John Holden (Indiana University professor)
“Trade groups often draft talking points for officials, but the mix of state and federal claims creates a tangled legal landscape.”
Holden notes that the rapid rise of legalized sports betting has forced regulators to work closely with the industry, potentially compromising independence.
Recent Developments
- May 2026 – Maryland’s Attorney General joined a coalition of 41 attorneys general, urging the CFTC to recognize state authority over these contracts.
- AGA’s defense – The draft letter argues that prediction markets evade state law and steal tax revenue, asserting Congress intended sports betting to be regulated at the state level.
- Opposition – They claim prediction markets differ from casinos and sportsbooks: exchanges take a small fee, have no incentive to win or lose against customers, and offer more balanced risk.
Economic Impact
- Maryland’s sports‑betting tax revenue (FY 2026): ~$125 million, a jump of more than 50% compared to the previous year.
- Critics argue regulators should let federal agencies handle these contracts for consistent oversight across national financial markets.
Bottom Line
Maryland’s use of an AGA‑supplied draft letter to lobby the CFTC has sparked a broader debate about whether sports‑prediction markets should fall under state or federal jurisdiction. The outcome could reshape the regulatory landscape for an industry that is rapidly expanding across the United States.
