It has requested a temporary restraining order (TRO) and a preliminary injunction to prevent the state from enforcing a recent cease-and-desist order.
The lawsuit follows the MLGCC’s directive issued just over two weeks prior, which ordered Kalshi to cease operations in Maryland.
The commission alleged that Kalshi’s offering of contracts based on sports events was legally equivalent to sports betting, a sector tightly regulated under state law.
In response, Kalshi contends that its operations are not sports betting but rather federally sanctioned peer-to-peer swaps, regulated exclusively by the Commodity Futures Trading Commission (CFTC).
Kalshi’s legal filing argues that the MLGCC’s attempt to halt its activities is in direct conflict with federal law.
The company emphasised that its operations fall under the exclusive jurisdiction of the CFTC, as set out in federal statutes governing commodity exchanges.
Kalshi asserts that the state’s interference not only threatens its business model but undermines the federal regulatory framework intended to prevent a fragmented, state-by-state oversight regime.
Kalshi confident in its status
In its 19-page TRO and injunction request, Kalshi states that without immediate relief, the MLGCC’s actions will cause “irreparable harm” to the platform and its base.
The filing warns that unless judicial intervention is granted, other states might follow Maryland’s lead, resulting in conflicting regulations.
Kalshi also pointed out that the CFTC has not yet taken a formal position on the legality of sports event contracts.
A public roundtable to address the issue is scheduled for 30 April, and Kalshi argues that in the absence of a definitive ruling from the federal regulator, states should not act independently to restrict its operations.
The Maryland case follows two recent legal confrontations between Kalshi and other state authorities.
In a separate dispute with the Nevada Gaming Control Board (NGCB), the US District Court for the District of Nevada sided with Kalshi, granting a preliminary injunction that barred the state regulator from enforcing its cease-and-desist order.The presiding judge, chief judge Andrew P. Gordon, ruled that the platform fell under the CFTC’s exclusive jurisdiction and that state regulation in this context was preempted by federal law.
Chief Judge Gordon also criticised the pattern of cease-and-desist letters sent to Kalshi by multiple state regulators, stating that it underscored the regulatory confusion and disruption caused when states attempt to govern entities under federal oversight.
Kalshi referenced this ruling in its Maryland lawsuit to bolster its claim that similar judicial intervention is warranted.
The exchange also cited ongoing litigation with the New Jersey Division of Gaming Enforcement (DGE), indicating a coordinated effort by some state regulators to challenge Kalshi’s legality.
Kalshi not giving up
Kalshi’s CEO, Tarek Mansour, has been outspoken in defending the company’s position, promising to not back down.
Last month, Mansour took to LinkedIn to assert that the cease-and-desist orders demonstrate a fundamental misinterpretation of the prediction markets industry.
Kalshi claims it offers significant utility and should not be conflated with traditional gambling.
At the heart of the controversy are Kalshi’s sports event contracts, which allow s to trade based on predictions of outcomes, such as the result of a particular game.
The contracts are available nationwide to s aged 18 and over, including in states where sports betting remains illegal.
This wide accessibility has fueled debate over whether Kalshi’s products are functionally equivalent to sports wagers.
In the cease-and-desist letter issued by the MLGCC, agency director John Martin expressed concern that Kalshi’s model was essentially indistinguishable from conventional sports betting.
Martin stated that making predictions on game outcomes in exchange for financial gain mirrored the core mechanics of placing a wager, a practice strictly controlled under Maryland law.
As the CFTC roundtable approaches, Kalshi continues to advocate for federal clarity and protection against what it describes as premature and inconsistent state-level enforcement.
The outcome of these legal proceedings could set important precedents for the future of federally regulated prediction markets – as well as sportsbooks – operating across state lines.
