Maryland Gaming Regulator’s Use of AGA Template Letter Raises Independence Questions in Prediction Markets Debate
The Maryland Lottery and Gaming Control Agency (MLGCA) received a template letter from the American Gaming Association (AGA) in April of last year urging the Commodity Futures Trading Commission (CFTC) to ban sports-related event contracts offered by platforms such as Kalshi and Polymarket. Days later, the MLGCA sent a cease-and-desist letter to Kalshi that incorporated much of the same language. Documents obtained through a public records request have surfaced, prompting scrutiny over whether the regulator acted independently or at the direction of commercial casino interests.
This episode sits at the intersection of regulatory oversight, industry lobbying, and the rapid growth of prediction markets. For gaming operators and tribal executives navigating similar tensions, it underscores how traditional casino stakeholders are responding to emerging competitors. The convergence of these verticals is creating structural friction that state agencies must manage with care.
Questions Over MLGCA Independence
Sean Patrick Maloney, president and CEO of the Coalition for Prediction Markets, described the AGA template as a “smoking gun.” The MLGCA is not operating independently due to casino lobbyists’ influence through the AGA.
“They (the MLGCA) are clearly taking their marching orders from the casino lobbyists,” Maloney said. “That’s not what the citizens of Maryland deserve. They deserve people doing the public’s work, not running errands for casino lobbyists.”
An email from John Martin, director of the Maryland Lottery and Gaming Control Agency, from April 22, 2025, referenced a “possible action” involving a letter to CFTC commissioners that had been “provided by the American Gaming Association (AGA).” These materials have fueled claims that the regulator’s actions align too closely with commercial casino priorities.
Maryland’s casino sector remains a significant revenue source for the state. Casinos generated more revenue this April compared to the prior year, delivering substantial tax income. Yet potential competition from prediction market platforms could divert patrons and reduce that fiscal contribution.
The AGA’s Role and Policy Position
The AGA, which represents commercial casinos, supplied the template letter to Maryland officials. The organization has defended its stance without disputing that it provided the draft before the MLGCA submitted its own version to the CFTC.
An AGA spokesperson stated that Congress intended for sports betting to be regulated by states and tribal governments. The letter, according to the spokesperson, reflects an effort to uphold Maryland’s gambling laws for the benefit of its residents.
This lobbying dynamic is not unusual in regulated gaming markets. Trade associations routinely supply templates and talking points to align policy with industry views. In this case, the AGA’s position centers on preserving the state-based framework for sports betting against what it sees as encroachment by event contract offerings.
For client-partners operating across multiple jurisdictions, such advocacy highlights the importance of monitoring how incumbents engage regulators on emerging verticals. The prediction markets space continues to test boundaries established under laws written for a different era.
MLGCA’s Defense and Expert Context
A spokesperson for the MLGCA maintained that the agency acted independently. The spokesperson explained that officials evaluated the issue and reached their position based on what serves the state’s best interests.
John Holden, a professor of business law at Indiana University who specializes in sports betting regulation, noted that it is common for trade associations such as the AGA to prepare template letters. He pointed to the close working relationship that often develops between state regulators and the casino industry they oversee, particularly following the rapid expansion of legal sports betting across the US.
This perspective frames the Maryland situation as part of a broader pattern rather than an isolated lapse. Regulators frequently interact with the sectors they license, creating opportunities for influence that critics can later question.
Risks and Limitations in the Current Framework
One risk is that heightened scrutiny could erode public confidence in regulatory impartiality. If agencies appear to prioritize one vertical over another, it may invite legal challenges or calls for federal intervention in what has largely been a state-driven domain.
Critics like Maloney argue the MLGCA’s actions favor casino interests at the expense of innovation and consumer choice. Yet defenders counter that protecting established tax revenues and a regulated ecosystem serves the broader public interest. The tension reflects genuine policy disagreement over how to classify and oversee event contracts.
A limitation here is the lack of clear federal guidance. Until the CFTC or Congress provides more definitive direction on sports-related prediction products, states will continue to patchwork solutions that can appear influenced by local industry voices. This ambiguity creates operational uncertainty for operators on all sides.
The Bottom Line
The Maryland documents illustrate how lobbying templates can blur lines between regulator and regulated at a time when prediction markets are challenging traditional sports betting models. Gaming executives should view this as a reminder that structural shifts in the industry demand proactive engagement with policymakers to ensure balanced frameworks. As these markets mature, the focus must remain on clear rules that protect consumers while allowing responsible innovation to reach audiences across states and tribal lands. Operators and stakeholders would be wise to track similar developments closely and consider how best to contribute to the dialogue ahead.
