Maryland Judge Rejects Kalshi’s Request for Preliminary Injunction
Maryland Judge Rejects Kalshi’s Preliminary Injunction Request
US District Judge Adam Abelson in Maryland denied Kalshi’s motion for a preliminary injunction aimed at halting the actions of the state’s sports betting regulators. This decision was announced in a court ruling released last Friday.
Background of the Maryland Sports Betting Dispute
The dispute began after the Maryland Lottery and Gaming Commission (MLGC) issued a cease-and-desist order to Kalshi in April. Kalshi had sought a preliminary injunction and temporary restraining order to block the MLGC’s enforcement measures. Central to the conflict is Kalshi’s offering of prediction contracts linked to the outcomes of sporting events. The MLGC classifies these contracts as unregulated sports betting, leading to its regulatory intervention.
Kalshi disagrees with this classification, arguing that its platform, which allows users to purchase contracts based on event results, does not amount to sports betting under the law.
The court’s decision reflects a presumption against federal preemption, emphasizing Maryland’s authority to regulate both prediction markets and sports gambling. This contrasts with rulings in New Jersey and Nevada, where federal courts previously granted Kalshi preliminary injunctions against state regulators.
Previous Legal Battles Faced by Kalshi
Kalshi has received cease-and-desist letters from regulators in more than a dozen states, with authorities claiming the company’s prediction contracts violate gambling laws. Maryland is notable because local tribes also challenged Kalshi’s sports-related contracts, citing conflicts with tribal gaming regulations.
In response to these challenges, Kalshi has initiated lawsuits against multiple state authorities. Courts in Nevada and New Jersey have ruled in favor of Kalshi, affirming federal jurisdiction over its operations and limiting state regulatory reach.
However, the Maryland ruling represents a notable defeat for Kalshi. The company’s attempt to secure similar protections against state enforcement was unsuccessful in this instance.
Despite this setback, Kalshi plans to continue operating in Maryland while pursuing further legal action and potential appeals. This ruling introduces new questions about the future legality and sustainability of prediction markets within the US.