Baltimore Sues Kalshi and Polymarket over Alleged Unlicensed Sports Betting

BALTIMORE – Baltimore has sued Kalshi and Polymarket, alleging their sports prediction markets amount to unlicensed gambling under Maryland law. The cases seek to stop the platforms from accepting sports-related transactions from city residents and add another challenge to prediction-market regulation.

Mayor Brandon M. Scott and the City Council filed separate actions in Baltimore City Circuit Court on Aug. 13 under the city’s Consumer Protection Ordinance. According to Baltimore’s official announcement, the complaints accuse both platforms of misleading consumers about the legality and regulatory status of their products.

City Says Event Contracts Function Like Sports Bets

Baltimore alleges that Kalshi and Polymarket allow residents to take positions on game winners, point spreads, totals, player statistics and other propositions also offered by licensed sportsbooks. The city argues that describing those products as event contracts or prediction-market trades does not remove them from Maryland’s gambling laws.

“These companies are running sportsbooks without licenses and betting that a new label will put them above the law”, Scott said. The complaints allege the platforms compete with regulated sportsbooks without being subject to the same state licensing, taxation, responsible-gambling and consumer-protection requirements.

The Kalshi complaint also names entities associated with Robinhood, Webull and Coinbase, which the city accuses of facilitating sports-event transactions. The separate Polymarket complaint names QCX LLC, Blockratize Inc. and QC Tech LLC.

Kalshi and Polymarket Invoke Federal Oversight

Both prediction-market operators dispute Baltimore’s position and maintain that federal derivatives law governs their products. Kalshi told WBAL-TV that it is “operating lawfully under the exclusive jurisdiction of its federal regulator”, while Polymarket said prediction markets on CFTC-registered exchanges are governed by federal law rather than differing state and local rules.

The jurisdictional dispute is already before federal courts. After Maryland regulators ordered Kalshi to halt sports prediction markets in April 2025, Kalshi sued state officials and argued that the Commodity Exchange Act preempts Maryland’s sports-wagering rules.

A federal judge denied Kalshi preliminary relief in August 2025, and the company appealed. The Fourth Circuit heard arguments in that appeal on May 7, 2026, but has not issued a decision resolving the dispute.

Baltimore Seeks Injunctions, Restitution and Penalties

Baltimore is asking the state court to prohibit the defendants from operating what it describes as unauthorized sports-wagering platforms in the city and from accepting transactions from Baltimore residents. Both complaints also seek restitution, disgorgement of alleged unlawful gains and civil penalties, with the filings stating that penalties can reach $1,000 for each violation and each day a violation continued.

The actions extend Baltimore’s use of its Consumer Protection Ordinance against gambling businesses. The city sued DraftKings and FanDuel under the same ordinance in 2025 over separate allegations involving their treatment of vulnerable gamblers.

Kalshi and Polymarket can now contest Baltimore’s allegations and requested remedies in court. No ruling has been made on whether either platform violated the city’s consumer protection rules or Maryland gambling law.

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