Case 1:25-cv-01283-ABA Document 26 Filed 05/09/25 Page 9 of 36
choice for traders on its market. ECF 1 at ¶¶ 47-49. Similar to traditional sportsbooks, individuals
purchase one of two outcomes for a sporting event based on a speculative prediction as to who
will win the event. Exhibit 3, Affidavit of Michael Eaton at ¶¶ 8, 9. In a manner similar to cashing
out a sports wager before the outcome of a game occurs, Kalshi permits traders to sell their interest
in gaming devices prior to the underlying contest being completed. Id. at ¶ 10.
Kalshi states that it differs from traditional sports wagering because “[t]raders do not bet
against the house but rather enter into contracts with other traders on an exchange.” ECF 2 -1 at ¶
26. Serving a similar function a s the “the house” in a traditional sportsbook, however, Kalshi
relies on its selected “market makers” to provide liquidity for its event contracts and to act “as the
counterparty to trades, thereby guaranteeing that there is almost always someone on the other side
Kalshi Help Center, Market Maker Program , https://help.kalshi.com
of a transaction.”
/markets/market-maker-program (last visited May 8, 2025) . According to Kalshi, “[t] here are
perks to being a market maker including but not limited to financial benefits, reduced fees,
differing position limits, and enhanced access.” Id. As they have admitted in its advertising,
Kalshi’s gaming devices are sports wagering, and calling them “sports event contracts” does not
change that fact.
II. M ARYLAND R EGULATES S PORTS W AGERING TO P ROTECT THE P UBLIC I NTEREST .
In 2018, the Supreme Court issued its ruling in Murphy overruling PASPA 4 and permitting
states to legalize sports wagering within their boundaries. Murphy v. Nat'l Collegiate Athletic
Ass'n , 584 U.S. 453, 486 (2018). Maryland voters approved sports wagering by a constitutional
referendum in 2020 and in December 2021 sportsbooks first offered sports wagering in the State.
Exhibit 4. Affidavit of John Martin at ¶ 5. Maryland currently has over 20 authorized sportsbooks
4 The Professional and Amateur Sports Protection Act, 28 U.S.C. § 3702
3
Made with FlippingBook - Online catalogs