Kalshi Reaches Deal With Maryland to Pause Gambling Law Enforcement During Appeal

Prediction market platform Kalshi has struck a temporary peace with Maryland regulators, putting its request for a new injunction on hold. The company will now wait for the outcome of its federal appeal before any state action moves forward.

Good to know

• Maryland has agreed not to enforce gambling laws against Kalshi while the appeal is pending.
• The dispute hinges on whether Kalshi’s sports event contracts are federally regulated commodities or state-regulated sports bets.
• A Fourth Circuit decision is unlikely before late 2025.

Under the agreement, filed Wednesday, Maryland will hold off on enforcement until the Fourth Circuit Court of Appeals rules on Kalshi’s ongoing case. Kalshi argued this assurance makes an injunction unnecessary during the appeal.

The case focuses on a key question: should Kalshi’s sports event contracts be treated as commodity derivatives under federal law or as wagers under state sports betting regulations? Kalshi maintains it operates as a federally regulated “designated contract market” under the Commodity Futures Trading Commission (CFTC) and is not subject to Maryland Lottery and Gaming control.

Maryland regulators have taken the opposite view, calling the products “indistinguishable” from traditional sports bets.

Kalshi’s appeal schedule has the company filing its opening brief by September 15, with Maryland’s response due by October 15. A ruling could take several months. If Maryland wins, the state could reinstate its enforcement order immediately.

The agreement comes after Kalshi lost its first major courtroom battle in Maryland’s U.S. District Court. Judge Adam B. Abelson denied the company’s original request for an injunction, siding with the state’s authority over sports betting. While acknowledging the Commodity Exchange Act supersedes state laws on commodity trading, Abelson ruled it does not prevent states from enforcing their own gambling regulations. He even suggested Kalshi could apply for a Maryland sports betting license if it wanted to keep offering its sports event contracts.

Before the agreement, Kalshi had sought a new injunction to continue operating during the appeal. The company argued that complying with Maryland’s gambling laws before the court’s decision was unrealistic and could cause significant financial harm if the state enforced its cease-and-desist order, only for the appellate court to later overturn the lower ruling.