Maryland Strengthens Enforcement Against Sweepstakes Casinos and Prediction Markets
Maryland Targets Unlicensed Sweepstakes Casinos
The Maryland Lottery and Gaming Control Agency (MLGCA) has ramped up enforcement actions against unlicensed sweepstakes casinos, indicating the state’s firm commitment to regulating and limiting unauthorized gambling activities. This crackdown highlights Maryland’s intent to ensure that all gaming operations adhere closely to state laws.
Cease-and-Desist Notices Issued to Sweepstakes Operators
Recently, the MLGCA issued a second cease-and-desist order to Virtual Gaming Worlds (VGW) and its associated brands, Lucky Land Slots and Chumba Casino. These operators were found to be conducting illegal online gaming services within Maryland. This action follows a prior warning issued in March, emphasizing that such activities are not permitted under current state gambling regulations.
Maryland law authorizes only specific types of online gaming, such as sports betting and mobile fantasy contests. Any other forms of online gambling, including those branded as sweepstakes or social gaming, are prohibited. Since VGW lacks the necessary licenses for sports wagering, casino gaming, or fantasy contests in Maryland, the agency considers their operations unlawful.
The companies involved have been given a 10-day period to respond to the agency’s notice and clarify any allegedly illegal services offered within the state. The MLGCA also warned that continued violations could severely hinder any future applications for a gaming license in Maryland.
Growing Focus on Prediction Markets
In addition to the sweepstakes crackdown, Maryland’s regulator has also scrutinized the expansion of prediction markets by sports betting operators. As these platforms gain interest, the state has joined seven other U.S. jurisdictions in cautioning operators that involvement in unlicensed prediction markets could result in the revocation of gambling licenses.
Prediction markets, when offered without the proper Maryland sports wagering license, are treated as illegal sports betting within the state. The regulator further warned that participation in prediction markets hosted in other states may also have repercussions, signaling stringent oversight for operators exploring this emerging sector.
This warning comes amid efforts by major industry players like FanDuel, DraftKings, and Fanatics to enter the prediction market arena.
Maryland’s Legal Battle with Prediction Market Operators
Maryland’s tough stance is also reflected in its ongoing legal dispute with Kalshi, a prediction market platform. Earlier in the year, the state ordered Kalshi to cease operations, prompting the company to file a lawsuit challenging the directive. The dispute is currently under review in the Fourth Circuit Court of Appeals.
While the court initially mandated a halt to Kalshi’s activities, both parties have since agreed to maintain the current situation until the appellate case is resolved. This legal confrontation highlights Maryland’s firm approach to regulating new forms of gambling and its dedication to enforcing its regulatory framework.
