Baltimore sues Kalshi and Polymarket over unlicensed sports betting allegations

The city of Baltimore has filed a lawsuit against prediction market platforms Kalshi and Polymarket, alleging they are operating unlicensed sports betting services. The city claims these platforms disguise traditional sports wagering as ‘event contracts’ or ‘prediction markets’ to bypass Maryland state laws regarding licensing, taxation, and consumer protection.

In addition to the primary platforms, the lawsuit names Robinhood, Webull, and Coinbase as defendants. These companies act as distribution partners for Kalshi, allowing users to trade event contracts directly within their apps. Baltimore officials allege these partners used deceptive marketing to lead Maryland residents to believe these products were legal.

Kalshi and Polymarket have both denied the allegations, arguing that their operations fall under the federal jurisdiction of the Commodity Futures Trading Commission (CFTC) rather than state or local gambling laws. They maintain that their markets are regulated, transparent, and compliant with federal standards. The legal battle highlights an escalating jurisdictional conflict between state regulators and federal authorities over the legal status of emerging prediction markets.