The Maryland Lottery and Gaming Control Commission sent a warning letter to all licensed operators in the state. Commission Secretary John Martin signed the notice. It targets companies currently doing business in Maryland or planning to enter the market.
The warning specifically addresses involvement with prediction markets and sporting event contracts. Any operator offering these products through a designated contract market needs a valid Maryland sports wagering license. Without one, they’re breaking the law.
The letter doesn’t just focus on direct involvement. It also covers affiliates, key personnel, and related business entities. If any of these associations touch prediction markets without proper licensing, it could affect an operator’s standing in Maryland.
Why Maryland’s Taking This Regulatory Stance
The Commission views unlicensed prediction market operations as illegal activity. And illegal activity in any jurisdiction can damage a company’s qualifications for Maryland licensure.
The state wants to make its position clear before the prediction market space expands further. DraftKings, FanDuel, PrizePicks and Underdog Fantasy have all made recent partnerships or acquisitions in this area. More companies will likely enter by 2026.
Maryland’s not alone here. Pennsylvania, Michigan, Ohio and Illinois have issued similar warnings. But Maryland’s taking it a step further by defining involvement with unlicensed exchanges as explicitly illegal.
What the Commission Demands from Operators
The letter lays out specific requirements. Operators must notify the Commission promptly about any involvement with exchanges or designated contract markets. These DCMs fall under Commodity Futures Trading Commission regulation.
“Any involvement in the offering of sporting event contracts, directly or via an affiliate, key person, related business entity or other association, on a DCM without a valid Maryland sports wagering license may have implications to your licensure,” the letter states.
The Commission also warned that any direct or indirect association with unlicensed entities counts as illegal activity. This applies even if the association is just for financial gain.
How This Shapes Maryland’s Gaming Market
This warning creates uncertainty for operators looking to expand into prediction markets. Companies now need to either obtain proper Maryland licensing or stay completely clear of these products.
The timing matters. Maryland’s sports wagering market generated $14.1 million in state contributions during October 2025, according to figures released November 10. The state has financial interest in maintaining control over betting operations.
Other states will likely watch Maryland’s approach closely. If enforcement actions follow these warnings, more regulators might adopt similar stances. The prediction market sector faces a patchwork of state-level restrictions that could limit growth plans.
Operators now face a choice: pursue proper licensing in each market or risk their existing gaming licenses by offering prediction market products elsewhere.
