The Maryland Lottery and Gaming Control Agency (MLGCA) has intensified its scrutiny of unlicensed sweepstakes casinos, signaling that the state is ready to confront operators that skirt the boundaries of gambling law. The regulator also sent an official letter to the state’s regulated sportsbooks, warning that any expansion into prediction markets could result in the loss of their licenses.
Sweepstakes Face Rising Scrutiny
The MLGCA recently issued a second cease-and-desist notice to Virtual Gaming Worlds (VGW) subsidiaries Lucky Land Slots and Chumba Casino. According to the regulator, the operators were operating illegal online gaming services in the state. This notice is the second warning following the MLGCA’s initial cease-and-desist orders to these brands on March 17.
The notice stated that Maryland only allows online sports betting and mobile fantasy contests. Any form of online casino gambling, regardless of whether it is called a sweepstake, social gaming, or something else, is banned. Since VGW does not hold a Maryland sports wagering, casino gaming, or fantasy contest license, the regulator contends that the two brands violated Maryland law.
Lucky Land Slots and Chumba Casino have 10 days to respond to the regulator’s notice and are required to clarify whether they provided any illegal offerings in Maryland. The MLGCA also warned that failure to stop all gambling-related offerings could significantly impede any future attempts to obtain a license in the state.
Prediction Markets Are Gaining Popularity
Sweepstakes casinos weren’t the Maryland regulator’s only target. In a separate move, the MLGCA directed its scrutiny toward prediction markets as more sports betting operators seek to expand into that vertical. Maryland became the eighth US jurisdiction to warn operators that offering or partnering with prediction markets could lead to license revocations.
The regulator’s statement stressed that prediction markets are considered unlawful sports wagering if conducted without a Maryland sports wagering license. More notably, the commission warned that even participation in prediction markets in other jurisdictions could have negative consequences. This statement is especially relevant as leading operators such as FanDuel, DraftKings, and Fanatics seek to enter the prediction space.
Maryland’s stance also reflects its ongoing legal battle with prediction platform Kalshi. In April, the state ordered Kalshi to halt operations, leading to a lawsuit by the operator. The case is pending in the Fourth Circuit. Although the court initially ordered Kalshi to cease operations, the two parties agreed to maintain the status quo until the appeal’s conclusion.