Baltimore Sues Kalshi and Polymarket, First US City to Target Prediction Markets
Baltimore alleges Kalshi, Polymarket and partner apps ran unlicensed sports wagering, deepening North America's prediction-market legal fight.
This article was produced with AI assistance and edited by the ON360 newsroom.
The City of Baltimore has become the first U.S. municipality to sue prediction market operators, filing separate lawsuits against Kalshi and Polymarket on Aug. 13 that accuse the platforms of running unlicensed sports wagering operations in violation of the city’s Consumer Protection Ordinance.
Mayor Brandon Scott and the city filed the actions in Baltimore City Circuit Court, marking the third front in Baltimore’s campaign against online gambling companies in less than 18 months. The Kalshi complaint also names Robinhood, Webull and Coinbase, all of which offer Kalshi’s event contracts through their own apps.
Prediction Contracts Called “Illegal Sports Wagering”
Baltimore’s suit against Kalshi argues that sports-event contracts fit squarely within Maryland’s legal definition of sports betting, regardless of how the products are labelled. “While Defendants call the Kalshi platform a ‘prediction market,’ the platform plainly facilitates ‘sports wagering’ as defined under Maryland law,” the complaint states.
The filing leans on an earlier finding from the Maryland Lottery and Gaming Control Commission, which issued Kalshi a cease-and-desist order in April 2025 after concluding that buying one of the company’s sports contracts was “indistinguishable from the act of placing a sports wager.” Kalshi responded by suing Maryland in federal court, arguing its contracts fall solely under the Commodity Exchange Act and Commodity Futures Trading Commission oversight. A federal judge rejected Kalshi’s bid for a preliminary injunction in August 2025, and the dispute remains before the U.S. Court of Appeals for the Fourth Circuit.
Rather than relitigate that federal jurisdictional question, Baltimore is pursuing a consumer-protection theory. The city alleges Kalshi, Robinhood, Webull and Coinbase created a “false, deceptive, and misleading impression” that sports contracts can legally be traded in Maryland, and notes the platforms allow users as young as 18 — three years younger than Maryland’s minimum age for licensed sports betting.
The Polymarket lawsuit adds further consumer-risk allegations, claiming the company failed to adequately disclose dangers tied to insider trading, market manipulation and sophisticated professional traders. Baltimore also points to Polymarket’s moneylines, spreads, props, in-game markets, parlays and in-house market-making activity as evidence the platform functions like a traditional sportsbook rather than a neutral exchange.
City Seeks Shutdown, Restitution and Penalties
Baltimore is asking the court to bar both companies from offering unauthorized sports wagering to city residents, and to order restitution for affected consumers and disgorgement of alleged ill-gotten gains. The ordinance allows civil penalties of up to $1,000 per violation, with each day a violation continues counted as a separate offence.
Detroit previously filed an amicus brief backing Michigan regulators in a related federal case against Coinbase, but Baltimore’s lawsuits are believed to be the first direct municipal action of their kind against prediction market operators.
Part of a Wider Local Enforcement Push
Baltimore first sued DraftKings and FanDuel in April 2025 over allegedly predatory bonus offers and VIP targeting of vulnerable customers, though that case remains paused pending a Fourth Circuit appeal over a remand order. In March 2026, the city sued six sweepstakes casino operators — VGW, B2Services, Yellow Social Interactive, Sweepsteaks Limited, High 5 Games and Blazesoft — alleging they disguise real-money online casino gambling as promotional sweepstakes.
The prediction market fight is being closely watched in Canada as well, where operators and regulators have monitored how U.S. courts classify sports-linked event contracts. Ontario’s regulated market requires licensed operators to offer responsible-gambling tools such as deposit limits and self-exclusion, protections that remain central to how provincial regulators like the AGCO and iGaming Ontario approach any new betting-adjacent product.
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