Prediction market operators are accusing state regulators and casino lobbyists of colluding to block their growth. Kalshi, Crypto.com, Robinhood, and Coinbase formed the Coalition for Prediction Markets to push back against what they claim is coordinated regulatory resistance.
The group alleges that Maryland's gaming regulator recycled language from casino lobby talking points when drafting an April letter targeting prediction market operators. The text matched casino lobby documents closely enough that the operators view it as evidence of direct coordination between state officials and established gambling interests protecting their turf.
This conflict sits at the intersection of two booming sectors. Prediction markets have exploded in popularity, allowing traders to bet on election outcomes, sports results, and other events. Traditional casinos see this as direct competition for consumer gambling dollars. State regulators, already influenced by well-funded casino lobbying operations, have become gatekeepers for new gambling categories.
The operators' complaint exposes a common regulatory playbook. Established gaming operators donate to state campaigns, fund lobbyists, and maintain relationships with regulators. When startups threaten their market share, those same lobbyists push regulators to create barriers to entry. Smaller platforms lack the resources to fight back at the state level.
Maryland becomes the first visible battleground, but this fight extends nationally. Multiple states are reassessing prediction market rules. Some have moved to restrict them entirely. Others require licensing under gambling frameworks designed for casinos, not crypto-native trading platforms.
The prediction market industry argues their products differ fundamentally from casino gambling. They offer price discovery mechanisms similar to futures markets. Users trade based on information and analysis, not pure chance. Regulators and casino operators counter that prediction contracts function as wagering products and belong under gaming oversight.
Kalshi and competitors will likely escalate this fight. They may challenge state restrictions in federal court, citing free