The City of Baltimore has launched a major legal offensive against prediction market platforms Kalshi and Polymarket, accusing them of operating illegal sports betting without Maryland licenses. The lawsuits, filed Thursday in Baltimore City Circuit Court by Mayor Brandon Scott and the Baltimore City Council, claim both platforms offer the same types of wagers as licensed sportsbooks — including game winners, point spreads, and player performance contracts — but without required state licenses, taxation, or consumer protections.
Mayor Scott directly addressed the platforms: “These companies are running sportsbooks without licenses and betting that a new label will put them above the law. It won’t.”
The Kalshi suit goes further by naming Robinhood, Webull, and Coinbase as co-defendants. Baltimore alleges those apps allowed users to trade Kalshi sports contracts directly within their own platforms, with eight counts of deceptive and unfair trade practices included in the complaint. The city also argues that combination bets offered through Kalshi and Robinhood function like parlays at traditional sportsbooks. Kalshi pushed back, saying it spent years getting regulated by the federal government and abides by all applicable regulations.
In the Polymarket case, Baltimore claims the platform created an internal market-making team that could take positions against its own users, meaning customers may sometimes be trading against the house rather than each other. The city also says Polymarket’s marketing misleadingly suggested its products are legal and fully regulated. City Solicitor Ebony Thompson said the platforms cannot circumvent consumer protections by repackaging gambling as something else. Polymarket responded that prediction markets on CFTC-registered exchanges are governed by federal law, not a patchwork of state and local rules.
The dispute highlights a growing clash between local authority and federal oversight. The US Commodity Futures Trading Commission has taken the position that event contracts on prediction markets are “swaps” under its authority, while Baltimore’s lawsuits directly challenge that view. Legal experts suggest the conflict could eventually reach the Supreme Court. Baltimore is seeking maximum statutory penalties, restitution for affected users, disgorgement of proceeds, and a court order blocking the platforms from offering sports contracts to residents. No court dates have been set.
