Maryland’s gambling regulator faces scrutiny after documents suggest a template letter from the American Gaming Association influenced its stance on prediction markets.
Key Takeaways
* Documents indicate the American Gaming Association (AGA) provided a template letter to the Maryland Lottery and Gaming Control Agency (MLGCA) regarding prediction markets.
* The MLGCA subsequently urged the Commodity Futures Trading Commission (CFTC) to ban sports event contracts, raising questions about its independence.
* Critics highlight potential influence from casino lobbyists on state gambling regulatory decisions.
Scrutiny Over Regulatory Independence in Maryland
According to documents obtained through a public records request, the American Gaming Association (AGA), which represents commercial casinos, supplied Maryland officials with a template letter concerning the Commodity Futures Trading Commission (CFTC) and prediction markets in April of last year. This letter reportedly urged the CFTC to ban sports-related event contracts offered by companies such as Kalshi and Polymarket.
Questions regarding the independence of the Maryland Lottery and Gaming Control Agency (MLGCA) have arisen following these revelations. It appears Maryland utilized the letter, as the MLGCA sent a cease-and-desist letter to Kalshi just days later, ordering it to cease operations in the state. This communication reportedly incorporated wording from the original AGA document.
Allegations of Lobbyist Influence
Sean Patrick Maloney, president and CEO of the Coalition for Prediction Markets, a lobbying group for prediction market companies, has been a vocal critic. He described the letter as a “smoking gun” and stated the Agency lacks independence, suggesting it is influenced by casino lobbyists from the AGA to interfere with prediction market operations.
“They (the MLGCA) are clearly taking their marching orders from the casino lobbyists,” Maloney said. “That’s not what the citizens of Maryland deserve. They deserve people doing the public’s work, not running errands for casino lobbyists.”
Additional documents reviewed by Spotlight on Maryland revealed an email from John Martin, director of the Maryland Lottery and Gaming Control Agency, dated April 22, 2025. In this email, he reportedly discussed a “possible action” involving a letter to be sent to the CFTC commissioners, noting that the letter had been “provided by the American Gaming Association (AGA).”
State Interests and Regulatory Defense
The state’s casino industry is a significant contributor to tax income. Maryland’s casinos generated more revenue this year compared to 2025, with higher revenue translating to larger tax contributions. However, potential competition from prediction market platforms could impact casino patronage, potentially resulting in reduced tax revenue for the state.
When questioned about the letter, a spokesperson for the MLGCA stated the agency acted independently in forming its position. The spokesperson explained that the Agency evaluated the issue and determined its stance based on what it considered to be in the state’s best interests.
John Holden, a professor of business law at Indiana University who specializes in sports betting regulation, commented that it is common for trade associations like the AGA to prepare template letters and talking points for government officials. He noted that the rapid expansion of legal sports betting in the U.S. has led to a regulatory system where state regulators, such as the MLGCA, often work closely with the casino industry they oversee.
An AGA spokesperson defended the policy position outlined in the letter and did not dispute that the organization had provided the draft to Maryland officials before the agency submitted it to the CFTC. The spokesperson also stated that Congress intended for sports betting to be regulated by states and tribal governments, and the letter reflects an effort to uphold Maryland’s gambling laws for the benefit of its residents.
In other news regarding the state, one player recently won $1 million from the Maryland Lottery.
I remember the first time I saw Kai Tak, Hong Kong’s gambling city, I thought I was in a fairy tale. All the lights blinking, the music and the monumental buildings, what 9-year-old wouldn’t think they’ve come to a magical place? It was my father who brought me, dragging me along and when inside I was hit by the smell of frying duck. As soon as I hit 21 I returned to Kai Tak, A bit nervous to see if my mind had embellished the memory, but it hadn’t. Kai Tak was still a magical place. I decided I wanted to spend as much time as I could at this place, so I did.
