Kalshi Withdraws Injunction Request in Maryland After Reaching Agreement with State

Kalshi and Maryland Settle Legal Dispute Temporarily

Kalshi, a prominent platform specializing in prediction markets, has decided to withdraw its request for an injunction in Maryland following a mutual agreement with state authorities. Both parties will now await a judgment from the US Court of Appeals for the Fourth Circuit to resolve the ongoing legal matter.

Regulatory Concerns Over Kalshi’s Services

The swift expansion of prediction markets has drawn intense scrutiny from regulators and tribal authorities alike. As a leading provider in this space, Kalshi has faced challenges in multiple states concerning the nature of its offerings.

Kalshi maintains that its operations are under the oversight of the Commodity Futures Trading Commission (CFTC), which exempts it from state gambling laws. Despite this, several state regulators have criticized Kalshi’s services, labeling them as unlicensed gambling activities. Kalshi argues that its contracts on future events are fundamentally different from traditional gambling and has remained firm in this position, stating any changes would only follow directives from the CFTC.

Earlier in the year, the Maryland Lottery and Gaming Commission (MLGC) issued a cease-and-desist order against Kalshi, alleging that its services amounted to unauthorized betting and closely resembled sports betting offerings.

Temporary Understanding Allows Kalshi to Operate Uninterrupted

A Maryland court previously denied Kalshi’s attempt to secure a preliminary injunction against the state’s regulators. Undeterred, Kalshi filed another injunction request, which it has now withdrawn as part of the agreement reached with Maryland officials.

According to this agreement, Maryland will temporarily suspend enforcement actions under its gambling laws against Kalshi’s platform. This arrangement permits Kalshi to continue its business activities without interruption during the legal review process.

Maryland officials have committed not to pursue further enforcement measures until the US Court of Appeals for the Fourth Circuit delivers its ruling. The court’s decision is anticipated more than two months after initial briefing deadlines, with Kalshi submitting its brief by September 15 and Maryland responding by October 15.

The outcome of this dispute will clarify whether Kalshi’s contracts on sports events fall under Maryland’s sports betting regulations. A ruling against Kalshi may influence regulatory approaches in other states facing similar issues.