Baltimore Takes Legal Action Against Kalshi and Polymarket Over Alleged Unlicensed Sports Wagering

Key Takeaways

Table of Contents

The City of Baltimore initiated legal proceedings against prediction platforms Kalshi and Polymarket for allegedly conducting unauthorized sports wagering activities
Coinbase, Robinhood, and Webull face allegations as co-defendants in the lawsuit targeting Kalshi
City authorities contend these platforms function as unregulated betting operations disguised under alternative terminology
Baltimore pursues financial penalties, user compensation, and injunctive relief to halt platform operations
The litigation creates a confrontation between municipal regulations and federal CFTC jurisdiction

On Thursday, Baltimore’s municipal government launched legal challenges against prediction platform operators Kalshi and Polymarket. Mayor Brandon Scott, alongside the Baltimore City Council, submitted complaints to Baltimore City Circuit Court, charging that these entities facilitated unauthorized sports wagering for city residents.

does this idiot not know kalshi is already in litigation against maryland?

— Christopher (@christopher7167) August 13, 2026

According to municipal authorities, both platforms provide wagering options comparable to authorized betting establishments, encompassing match outcomes, scoring margins, and athlete performance contracts, yet operate without proper state authorization, tax compliance, or user safeguards.

“These entities are operating betting operations without proper licensing and believe that rebranding will exempt them from legal accountability,” Mayor Scott declared. “That assumption is incorrect.”

The legal action against Kalshi extends beyond the Polymarket complaint. Baltimore designated Robinhood, Webull, and Coinbase as additional defendants, asserting these services enable customers to access Kalshi sports-related contracts through their proprietary applications.

The filing encompasses eight allegations of misleading and inequitable business conduct. It further contends that combination wagers available through Kalshi and Robinhood operate similarly to multi-bet options on conventional betting platforms.

Kalshi countered these allegations, emphasizing its compliance with federal regulations. “Kalshi invested considerable time obtaining federal regulatory approval and maintains full compliance with all relevant requirements,” stated a company representative.

Baltimore Claims Polymarket Engages in Conflicted Trading Practices

The legal complaint against Polymarket introduces additional allegations. Baltimore contends the platform established an in-house trading operation capable of positioning itself opposite customer trades, suggesting users might inadvertently compete against the platform rather than fellow participants.

Municipal officials further assert that Polymarket’s promotional materials created false impressions regarding the legitimacy and regulatory status of its offerings.

“Kalshi and Polymarket cannot evade Baltimore’s consumer protection framework by relabeling wagering activities,” stated City Solicitor Ebony Thompson.

Polymarket defended its position by asserting federal jurisdiction supersedes local authority. “Prediction markets operating on CFTC-registered platforms fall under federal oversight, not fragmented state and municipal regulations,” a Polymarket representative explained.

The US Commodity Futures Trading Commission maintains that event-based contracts on prediction platforms qualify as “swaps” subject to federal regulatory control. Baltimore’s legal actions directly contest this interpretation.

Jurisdictional Battle: Federal Versus Municipal Control

Legal analysts view this confrontation as part of an expanding tension between state-level and federal authorities regarding prediction market governance. Many anticipate this jurisdictional question will ultimately require Supreme Court resolution.

Baltimore seeks maximum allowable statutory fines, compensation for impacted customers, and forfeiture of revenues allegedly derived through unlawful means. City officials additionally request judicial intervention to prohibit these platforms from providing sports-related contracts to Baltimore residents.

As of Thursday, neither lawsuit has received scheduled hearing dates.

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