Kalshi Maryland: A State Truce, Then a City Lawsuit

Kalshi Maryland is the rare state page where the state and a city inside it are pulling in opposite directions at the same time. Maryland’s gaming regulator lost, then agreed to a truce. Baltimore sued anyway, days later, under a completely different law. This page covers both fights, because they don’t resolve the same way.

Legal status in Maryland

Maryland legalized sports wagering through Question 2, a November 2020 referendum approved by roughly 77% of voters, which authorized the legislature to license retail and mobile sportsbooks with tax revenue earmarked for the Blueprint for Maryland’s Future education fund. Mobile betting launched in November 2022. The Maryland Lottery and Gaming Control Commission (MLGCC), administered day-to-day by the Maryland Lottery and Gaming Control Agency (MLGCA), now licenses roughly a dozen mobile operators — bet365, DraftKings, FanDuel, BetMGM, Caesars, Fanatics, theScore Bet, Crab Sports, BetRivers, LetsBetMD, betPARX, and Bally Bet — at a 20% tax on mobile handle and 15% retail, among the higher mobile rates on the East Coast. Kalshi holds none of those licenses and instead lists sports event contracts under its federal CFTC designation. The MLGCC sent Kalshi a cease-and-desist letter in April 2025. Kalshi sued to block enforcement in the US District Court for the District of Maryland, and on August 1, 2025, Judge Adam B. Abelson denied Kalshi’s motion for a preliminary injunction — Kalshi’s first courtroom loss after earlier wins in Nevada and New Jersey. Kalshi appealed to the Fourth Circuit, where a three-judge panel sounded skeptical at May 2026 oral argument, with one judge invoking a colloquial “quacks like a duck” test for whether an event contract is functionally a sports bet. Rather than let Maryland enforce the cease-and-desist while that appeal is pending, the two sides reached an agreement, finalized in August 2026: Maryland paused enforcement against Kalshi’s sports contracts and Kalshi withdrew a separate pending injunction motion, leaving the underlying question to the Fourth Circuit. Then, on August 13, 2026, Baltimore’s Mayor Brandon Scott and the Baltimore City Council filed separate lawsuits against Kalshi and Polymarket — not under the state gambling statute Kalshi is fighting at the Fourth Circuit, but under Baltimore’s Consumer Protection Ordinance, alleging unlicensed sports betting and misrepresentation of the platforms’ legal status. The city’s complaint against Kalshi also names its distribution partners Coinbase, Robinhood, and Webull as defendants. Kalshi says it is “operating lawfully under the exclusive jurisdiction of its federal regulator” and intends to defend both cases. As of this writing, Kalshi is trading in Maryland under the negotiated state truce, with an unresolved Fourth Circuit appeal above it and a new city lawsuit running alongside it.

State gambling authority: Maryland Lottery and Gaming Control Commission (MLGCC)

Kalshi Maryland is two fights running on two different clocks. The state lost at the district court, then talked its way into a pause. The city inside that same state sued anyway, days later, under a law the state case never touches. Reading only one of them gives Maryland readers half the story.

A 20% Mobile Tax and a 77% Yes Vote

Maryland voters approved Question 2 in November 2020 by roughly 77% — a wide enough margin that the state legislature moved straight to building a licensed market, with sports-wagering tax revenue earmarked for the Blueprint for Maryland’s Future education fund. Mobile betting went live in November 2022. The Maryland Lottery and Gaming Control Commission (MLGCC) now licenses roughly a dozen mobile operators — bet365, DraftKings, FanDuel, BetMGM, Caesars, Fanatics, theScore Bet, Crab Sports, BetRivers, LetsBetMD, betPARX, and Bally Bet — at a 20% tax on mobile handle, one of the higher mobile rates on the East Coast. Kalshi holds none of those licenses and lists sports event contracts under its CFTC designation instead.

Maryland’s licensed sportsbook market, at a glance:

Question 2, approved November 2020 by ~77% of voters
Mobile betting launched November 2022
~12 licensed mobile operators, regulated by the MLGCC
20% tax on mobile handle, 15% retail
Revenue earmarked for the Blueprint for Maryland’s Future education fund

Is Kalshi Legal in Maryland? The State Lost, Then Made Peace

The MLGCC sent Kalshi a cease-and-desist letter in April 2025. Kalshi sued in the US District Court for the District of Maryland to block enforcement, and on August 1, 2025, Judge Adam B. Abelson denied Kalshi’s request for a preliminary injunction — Kalshi’s first courtroom loss after earlier wins in Nevada and New Jersey. Kalshi appealed to the Fourth Circuit. At oral argument in May 2026, the three-judge panel sounded skeptical, with one judge reportedly reaching for a colloquial “quacks like a duck” test for whether an event contract functions as a sports bet regardless of what the CFTC calls it.

The truce is a pause, not a ruling. Rather than let Maryland enforce the cease-and-desist while the appeal sits open, the two sides reached an agreement finalized in August 2026: Maryland paused enforcement against Kalshi’s sports contracts, and Kalshi withdrew a separate pending injunction motion. Nothing about the underlying legal question has been decided — it now sits entirely with the Fourth Circuit.

Then Baltimore Sued Anyway

On August 13, 2026 — almost immediately after the state-level truce — Baltimore Mayor Brandon Scott and the Baltimore City Council filed separate lawsuits against Kalshi and Polymarket. Neither suit relies on the state sports-wagering statute tied up at the Fourth Circuit. Both invoke Baltimore’s Consumer Protection Ordinance, alleging the platforms offer unlicensed sports betting under a different name and misrepresent their legal and regulatory status to residents. The city’s complaint against Kalshi goes a step further than most actions filed anywhere in the country: it names distribution partners Coinbase, Robinhood, and Webull as co-defendants, treating them as part of how Baltimore residents reached Kalshi’s markets. Kalshi says it is operating lawfully under its federal regulator’s exclusive jurisdiction and plans to defend both cases.

Is Kalshi Safe to Use in Maryland Right Now?

You can open an account and trade from Maryland today under the negotiated state pause, with a Fourth Circuit ruling and a Baltimore consumer-protection lawsuit both still open above it. Safe here still means CFTC oversight and KYC verification — it does not mean investment-safe, and it does not mean the current truce survives an adverse appellate ruling. Maryland’s licensed sportsbooks operate under MLGCC consumer protections that Kalshi, sitting outside that permit system, isn’t required to match. This isn’t a way to make money, in Maryland or anywhere else on this site. 21+ only, and if it stops feeling like a choice, 1-800-GAMBLER is free and confidential.

Kalshi Maryland — Frequently Asked Questions

Is Kalshi legal in Maryland?

It’s operating, but not because a court cleared it. Kalshi lost its bid for a preliminary injunction at the district court in August 2025, which would have let Maryland enforce its cease-and-desist letter. Instead of enforcing, the two sides agreed in August 2026 to pause enforcement until the Fourth Circuit rules on Kalshi’s appeal. That’s a negotiated pause, not a legal green light.

Why is Baltimore suing Kalshi if the state made a truce?

Because Baltimore City is a different party using a different law. The state’s fight is over Maryland’s sports-wagering statute in federal court. Baltimore’s lawsuit, filed August 13, 2026 by Mayor Brandon Scott and the City Council, invokes the city’s own Consumer Protection Ordinance and accuses Kalshi of misrepresenting its legal status to residents — a separate legal theory that the state-level truce doesn’t touch.

Why did Baltimore also sue Coinbase, Robinhood, and Webull?

The city’s complaint treats them as distribution partners that helped route Baltimore residents into Kalshi’s sports event contracts, and names them as co-defendants alongside Kalshi. It’s an unusual move — most state and federal actions against Kalshi have targeted the exchange itself, not the brokerages that offer access to it.

Is Kalshi legit in Maryland?

As a company, yes — CFTC designation since 2020, KYC-verified accounts, dollar settlement. Maryland’s dispute, at both the state and city level, is about whether that federal status overrides state and local gambling and consumer-protection law, not about whether Kalshi pays out on winning contracts.

Is Kalshi safe to use in Maryland right now?

You can open an account and trade today under the state’s enforcement pause, with a Fourth Circuit ruling and a Baltimore consumer-protection lawsuit both still pending. Safe here means CFTC oversight and KYC verification — not investment-safe, and not immune from a court reversing the current truce. Maryland’s licensed sportsbooks operate under MLGCC consumer protections that Kalshi, outside that license system, isn’t required to match.

What happens if the Fourth Circuit rules against Kalshi?

The negotiated pause was tied explicitly to that appeal, so a loss would likely let Maryland resume enforcing its cease-and-desist — similar to what already happened in Michigan and Washington after their own adverse rulings. A win would move Maryland closer to the Third Circuit’s pro-Kalshi outcome in New Jersey. Either way, Baltimore’s separate city lawsuit would keep running under its own timeline.

Before You Play

How SWRNN Reviews Sportsbooks & Casinos Responsible Gambling Resources About SWRNN