Maryland Elections Chief Warns Residents Against Prediction Market Trades on Primaries
Maryland residents must stay away from prediction market trades on the outcome of elections or risk prosecution for illegal wagering. State Elections Administrator Jared DeMarinis delivered the warning after the June 23 primaries. The stance puts Maryland squarely in the growing clash between state gambling regulators and the Commodity Futures Trading Commission.
DeMarinis made his position clear in an interview with Maryland Matters. This comes as trading volumes on platforms like Kalshi and Polymarket hit notable levels during the primary cycle.
The Core Warning and Its Legal Framing
Putting money into a prediction market on whether a candidate will win or lose counts as making a wager. “They are making a bet,” he said. “Putting money in the prediction market, saying a candidate is likely to win or lose the election, is making a wager.”
This view treats election contracts as classic gambling under state law. It directly challenges the federal position that these are swap deals outside the reach of state wagering statutes. The distinction matters because it determines who holds regulatory authority.
Traders on Kalshi saw scores of Maryland primary contracts pay out in recent hours. Volumes on some popular contracts rose above the $100,000 mark. On Polymarket traders backed Dan Schwartz in the MD-01 Democratic primary at a 97% rate with volumes above the $11,000 mark. Those payouts prove the markets functioned as designed.
CFTC Preemption and the Escalating Regulatory Clash
The comments will likely stoke the ire of the Commodity Futures Trading Commission. The CFTC has repeatedly said it alone has the authority to regulate prediction market operators such as Kalshi and Polymarket.
The agency views these platforms as offering swap deals rather than wagers. This framing means states cannot apply their gambling laws. The result has been an impasse with many states filing lawsuits against the platforms and the CFTC filing lawsuits against nine states in response.
A CFTC spokesperson quoted in the same outlet delivered a direct message to Maryland. The state “can see the actions the commission has taken against other states who have tried to bypass federal law and attempted to regulate our markets.” The spokesperson added “We plan to continue defending our jurisdiction.”
From the supplier side this kind of regulatory ambiguity is what stalls commercial deals. After eighteen years across iGaming and sportsbook operations the pattern is familiar. Operators and platforms wait for clear lines before committing serious resources.
Maryland’s Potential Next Steps and Election Integrity Concerns
DeMarinis suggested Maryland could seek to join the growing number of states taking on regulators and prediction market players in court. “Whether or not I go after the prediction markets, I don’t know,” he said. “This is something we are looking at, and it’s definitely under review.”
He also highlighted the risk of insider trading on Maryland election outcomes. “This is something that could have real implications for the integrity of elections. It goes right to the heart of our electoral process,” DeMarinis said.
That concern carries weight in an election context. Yet it sits alongside the fact that traders with better information simply priced contracts more accurately. The integrity question collides with the efficiency that prediction markets demonstrated when 97% of Polymarket traders correctly called the MD-01 winner.
Risks, Counterarguments, and the Problem Gambling Context
Any enforcement push by Maryland carries clear risks. The CFTC has already signaled it will defend its jurisdiction aggressively. States pursuing similar action have faced federal lawsuits. A Maryland move could trigger another round in that cycle without resolving the underlying preemption question.
At the same time the state faces a documented rise in gambling problems. Last year the University of Maryland warned that problem gambling is on the rise in the Old Line State. A survey of 3,600 residents found almost 6% admitted to having gambling problems. That marked a rise of over 40% since the state legalized mobile and online sports betting in 2022.
Youth gambling addiction is also increasing. An official from the Maryland Center of Excellence on Problem Gambling told CBS News in December that children have called to report sports betting activity including betting with bookies at high school. Lawmakers responded this year by moving to ban sweepstakes casino platforms.
The tension is real. Prediction markets delivered sharp pricing on the primaries yet they operate in the same environment where problem gambling metrics are moving in the wrong direction. Regulators must weigh election integrity and gambling harm against the federal preemption reality.
In my experience across European regulated markets operators price in regulatory overhead faster than most analysts expect. The same likely applies here. Platforms will route around hostile states while users seek workarounds. That does not eliminate the compliance burden it simply shifts it.
The Bottom Line
Maryland’s warning exposes the unresolved preemption fight between the CFTC and states seeking to treat election contracts as illegal wagers. With trading volumes already exceeding the $100,000 and $11,000 marks on key races and clear payouts on the primaries the markets are not theoretical. State regulators eyeing enforcement must now decide whether to join the lawsuit wave or accept the CFTC’s jurisdiction claim. The outcome will shape how prediction platforms interact with the fifty-state patchwork ahead of larger national contests. Watch which path Maryland chooses because it will signal how seriously other states treat the federal pushback.
