Hassan Maishera
TL;DR
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Baltimore has sued Kalshi and Polymarket, alleging their sports-event contracts constitute unlicensed gambling.
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The lawsuit against Kalshi also names Coinbase, Robinhood and Webull as distribution partners.
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City officials claim the platforms offer wagers comparable to those available through licensed sportsbooks.
Baltimore has filed lawsuits against prediction market operators Kalshi and Polymarket, accusing the companies of offering illegal sports betting without the licenses required under Maryland law.
Mayor Brandon Scott and the Baltimore City Council filed separate complaints in Baltimore City Circuit Court on Thursday. The lawsuits allege that the platforms violated the city’s Consumer Protection Ordinance by making sports-event contracts available to Baltimore residents without complying with state gambling regulations.
According to the city, Kalshi and Polymarket provide products that function like conventional sports wagers despite being marketed as prediction market contracts.
Baltimore Says Event Contracts Resemble Sportsbook Wagers
The lawsuits argue that Kalshi and Polymarket allow users to trade contracts based on game winners, point spreads and individual player performances—the same types of outcomes commonly offered by licensed sportsbooks.
Baltimore claims that presenting these products as financial event contracts does not change their underlying nature as sports bets.
City officials also allege that the platforms avoid the licensing requirements, taxes and consumer-protection measures imposed on authorized sportsbook operators in Maryland.
“These companies are running sportsbooks without licenses and betting that a new label will put them above the law,” Scott said.
The dispute reflects a growing regulatory battle over whether sports-focused prediction contracts should be governed primarily as federally regulated derivatives or as gambling products subject to state and local laws.
Baltimore’s lawsuit against Kalshi extends beyond the prediction market operator itself.
The complaint names Kalshi Inc. and KalshiEX LLC alongside Robinhood Markets, Robinhood Derivatives, Webull Corporation, Webull Financial and Coinbase Financial Markets.
According to the filing, Coinbase, Robinhood and Webull distribute Kalshi’s event contracts through prediction market sections built into their respective platforms. Users can therefore access sports contracts directly without leaving the companies’ applications.
The city alleges that these partnerships help make unlicensed sports betting widely available to Baltimore residents.
Its complaint includes eight counts involving allegedly deceptive and unfair trade practices. Baltimore also argues that “combo” contracts available through Kalshi and Robinhood operate similarly to parlays offered by traditional sportsbooks, allowing customers to combine multiple outcomes into one position.
Kalshi Cites Federal Regulatory Status
Kalshi rejected Baltimore’s allegations and said it would defend itself in court.
A company spokesperson argued that consumers use regulated prediction markets such as Kalshi, Robinhood and CME because they operate as neutral, transparent marketplaces. The spokesperson added that Kalshi spent years obtaining federal regulatory approval and complies with applicable consumer-protection requirements.
Kalshi is regulated at the federal level by the Commodity Futures Trading Commission. The company has consistently maintained that this status permits it to offer event contracts nationwide without obtaining separate state gambling licenses.
State and local authorities increasingly dispute that position, particularly when the contracts involve sporting events and closely resemble wagers available through licensed sportsbooks.
This disagreement creates a broader jurisdictional question over whether federal commodities regulation can preempt state gambling laws.
Baltimore’s separate complaint against Polymarket names QCX LLC, Blockratize Inc. and QC Tech LLC, which the city collectively identifies as Polymarket.
The city alleges that Polymarket has blurred the distinction between a peer-to-peer prediction market and a conventional sportsbook.
According to the complaint, the platform established an internal market-making operation capable of taking positions opposite its users. Baltimore argues that this means customers may sometimes be trading against the platform itself rather than exclusively against other market participants.
The lawsuit also claims that Polymarket’s promotional materials give consumers the potentially misleading impression that all its services are lawful and properly regulated.
City Solicitor Ebony Thompson said neither Kalshi nor Polymarket can avoid Baltimore’s consumer-protection rules by rebranding gambling products or claiming that federal oversight places them beyond local law.
City Seeks Penalties and a Ban on Unauthorized Betting
Baltimore is asking the court to impose the maximum statutory penalties available under its Consumer Protection Ordinance.
The city is also seeking restitution for affected customers and the disgorgement of revenue it alleges the companies obtained unlawfully. Disgorgement would require the defendants to surrender proceeds connected to the disputed activities.
Additionally, Baltimore wants the court to prevent Kalshi and Polymarket—and the distribution platforms named in the Kalshi case—from continuing to offer unauthorized sports betting products to city residents.
