DeMarinis Asks State Prosecutor To Investigate Prediction Markets

By Bryan P. Sears, Maryland Matters

July 23, 2026

Maryland’s top election official is asking the state prosecutor to investigate the legality of prediction market platforms.

The letter comes weeks after Elections Administrator Jared DeMarinis issued a strong warning about wagering on the outcome of elections in the state, which is illegal. The potential for a criminal investigation could make Maryland unique among states that have attempted to regulate the new industry.

DeMarinis, in a one-page letter to the Office of the State Prosecutor, said he believes the law is clear.

“Currently, prediction market platforms permit participants to wager money on the outcome of State and local elections, with financial returns dependent upon the results certified by election officials,” DeMarinis wrote in his letter dated July 23. “These activities raise substantial questions as to whether such contracts constitute prohibited wagering on election outcomes under Maryland law. From my plain reading of the statute and how the sites operate, I believe they do.”

And if the law is not clear, the prosecutor’s office should review state law and make recommendations on “any action you determine to be appropriate including seeking a clarification regarding the application of Election Law … to election prediction markets,” DeMarinis wrote.

The letter obtained by Maryland Matters does not ask the prosecutor to go after individuals who wagered on Maryland elections. In June, DeMarinis held that out as another possibility and warned against the practice.

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Maryland law prohibits wagering on the outcome of elections.

Prediction markets like Kalshi and Polymarket allow users to predict the outcome of events — typically sporting events, but also political races — and trade on the outcome, profiting if they guess right, losing their investment if not.

The companies argue that users are not making bets but are engaging in market trading — a claim buttressed by the Commodity Futures Trading Commission, the federal agency that regulates the U.S. derivatives market and has vigorously opposed states’ efforts to rein in prediction markets.

Violations of Maryland’s law against betting on elections are considered a misdemeanor punishable by a fine of $50 to $500. That fine is paid to the state. The total amount of wagers could also be seized by the state and potentially paid to various counties where the violations occurred. It is not immediately clear how that would be determined.

The state prosecutor handles criminal investigations related to election and campaign finance law.

During the primary, hundreds of thousands of dollars were spent on races in the Maryland primary election on sites like Kalshi and Polymarket.

“Maryland has a compelling interest in preserving the integrity and public trust of elections,” DeMarinis wrote. “Financial incentives should not influence or appear to influence election results. Artificial online markets should never determine electoral outcomes; only voters using their voice should determine electoral outcomes free of any undue influence, threats, intimidation or financial gain.

A number of states have attempted to regulate prediction markets, attempting to pass laws aimed at regulating and controlling the markets. Those laws and regulations have been met by lawsuits filed by the CFTC, which claims superseding jurisdiction over states when it comes to regulating the upstart industry. The commission says the platforms offer “swaps, not wagers.”

Maryland’s law predates the rise of prediction markets and focuses solely on banning wagering on election outcomes.

DeMarinis said what the prediction markets are doing related to elections is betting.

Maryland Matters is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501(c)(3) public charity. Maryland Matters maintains editorial independence. Contact Editor Steve Crane for questions: scrane@marylandmatters.org. Follow Maryland Matters on Facebook and Twitter.