Is Kalshi legal in Maryland? The case Kalshi lost, and the split it created

Explainer · Updated August 12, 2026 · 18+ · Not legal advice · By BetG8 Editorial · Prediction Markets

Forty-nine states tell roughly the same story: the state acts, a federal court stops it. Maryland is the exception that matters. A federal judge here looked at the same preemption argument that won in the Third Circuit and rejected it — and that disagreement is now the most likely route to the Supreme Court.

The timeline

Why Maryland is the most important state on this map

Every other state story is a variation on one result: a state acts, a federal court enjoins it, the CFTC piles on. Maryland broke the pattern. A federal judge examined the same Commodity Exchange Act preemption argument that later persuaded the Third Circuit, and was not convinced.

That disagreement is what creates a circuit split, and a circuit split is the most reliable route to the Supreme Court. If the Fourth Circuit affirms, sports event contracts would be lawful in the Third Circuit’s states and unlawful in the Fourth’s — an unstable arrangement that the Supreme Court exists to resolve.

What the Fourth Circuit panel actually signalled

Reading oral argument is unreliable, but the tenor was distinctive. The panel was openly sceptical that these contracts are anything other than gambling in substance, and pushed Kalshi on whether a product that functions like a sports bet can be regulated as something else entirely.

Scepticism about the product is not the same as scepticism about the law. Observers noted the judges appeared more receptive to the narrower statutory question — whether Congress, in drafting the Commodity Exchange Act, actually authorised this — even while describing the product as gambling. A ruling could therefore call these contracts gambling and still find them lawful.

Where Maryland fits nationally

Note the top two rows. The Third and Fourth Circuits are being asked the same question about the same product, and the first answered in Kalshi’s favour while the district court below the second did not. Every state fight on this list is provisional until that disagreement is resolved.

What it means for Maryland users

Access is normal at 18+, and that is a direct consequence of Maryland agreeing to hold enforcement until the Fourth Circuit rules. This is the one state where availability rests on a litigation standstill rather than on an injunction in Kalshi’s favour.

That makes Maryland the highest-variance state in the country for users. If the Fourth Circuit affirms the district court, the standstill ends and geofencing becomes a live possibility quickly. It is the single docket most worth watching, in Maryland and everywhere else.

This is analysis, not legal or betting advice. 18+.

FAQ

Is Kalshi legal in Maryland?

Kalshi is available in Maryland at 18+, but its position is weaker here than anywhere else. A federal district judge ruled against Kalshi’s preemption argument, and access continues only because Maryland agreed to pause enforcement until the Fourth Circuit decides the appeal.

Did Kalshi lose in Maryland?

Yes, at the district court level. The judge denied Kalshi’s request for an injunction blocking Maryland enforcement — the first significant judicial rejection of its argument that the Commodity Exchange Act preempts state gaming law.

Has the Fourth Circuit ruled?

Not as of August 12, 2026. Oral argument was heard May 7, 2026 and the decision is pending. Maryland’s enforcement pause remains in place until the court rules.

What is the circuit split over prediction markets?

The Third Circuit held on April 7, 2026 that sports event contracts are swaps under the Commodity Exchange Act and that CFTC preemption applies. The district court in Maryland reached the opposite conclusion, and courts in the Sixth Circuit, SD Ohio and WD Michigan have also preliminarily rejected the preemption theory. If the Fourth Circuit affirms, the split is formal.

Will this go to the Supreme Court?

A genuine split between federal appellate circuits on a question of federal preemption is among the strongest predictors of Supreme Court review. Nothing is certain, but the Maryland appeal is the case most likely to produce that split.

What happens to Maryland users if Kalshi loses the appeal?

The agreed enforcement pause would end and Maryland could resume action against sports event contracts. The most likely practical outcome is geofencing of sports markets for Maryland users, as happened in Nevada and Michigan.

Sources

• Law.com — ‘Basically gambling’?: 4th Circuit questions Kalshi’s anti-state-regulation claim
• Covers — Can Kalshi quash its ‘quacks like a duck’ sports betting problem?
• Sports Betting Dime — Maryland enforcement efforts against Kalshi paused until appeal ruling
• Third Circuit opinion — KalshiEX, LLC v. Attorney General New Jersey (No. 25-1922)

Next: Arizona's criminal case and why it collapsed

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