The City of Baltimore and Mayor Brandon M. Scott filed consumer protection lawsuits on August 13, 2026, against prediction market operators Kalshi and Polymarket. The actions, brought in the Circuit Court for Baltimore City, claim the companies ran unlicensed sports-betting platforms and misrepresented the legality of their products under Maryland law.

According to the complaints, Kalshi and Polymarket allowed city residents to place trades on game winners, point spreads, point totals, player statistics, and other outcomes commonly offered by licensed sportsbooks. The city maintains these “event contracts” function as unlawful wagers rather than legitimate financial instruments.

Core Allegations Against the Platforms

Baltimore asserts the companies competed directly with regulated sportsbooks while sidestepping state licensing requirements administered by the Maryland Lottery and Gaming Control Agency. By labeling the products as event contracts or prediction-market trades, the platforms allegedly avoided taxation, responsible-gambling rules, age restrictions, and other consumer safeguards that apply to licensed operators.

The lawsuits further contend that marketing materials created a false impression that the contracts could lawfully be purchased and traded by Maryland residents. Officials argue this conduct exposed vulnerable groups, including young adults and individuals with gambling problems, to financial risk.

City Solicitor Ebony M. Thompson stated that Kalshi and Polymarket cannot evade local consumer protections by repackaging gambling activity or asserting that federal oversight places them beyond the reach of city and state laws.

Distribution Partners Named in Kalshi Case

The complaint against Kalshi also names Robinhood Markets, Robinhood Derivatives, Webull Corporation, Webull Financial, and Coinbase Financial Markets. Baltimore alleges these firms enabled residents to access Kalshi sports contracts through prediction-market sections inside their own apps, allowing users to trade without leaving the brokerage platforms.

The city claims the partners engaged in deceptive practices by promoting the contracts in ways that suggested they were lawful for Maryland customers. Officials argue this expanded the scope of alleged consumer harm beyond the prediction market operators themselves.

Platform Responses and Federal-State Tension

A Polymarket spokesperson said city-specific enforcement conflicts with the Commodity Futures Trading Commission’s established framework for prediction markets. The company maintains that platforms operating on CFTC-registered exchanges are governed by federal law rather than a patchwork of state and local rules, citing prior court recognition of that principle.

Kalshi has pointed to its federal regulatory status and indicated it intends to defend the lawsuits on that basis. The dispute sits within a broader national conflict: federal authorities and industry participants have described event contracts as swaps subject to CFTC oversight, while multiple state and local governments treat sports-related contracts as illegal gambling when offered without state licenses.

Similar enforcement efforts have appeared in other jurisdictions, and legal observers anticipate the classification question may eventually reach higher courts, including potentially the U.S. Supreme Court.

Relief Sought by the City

Baltimore seeks an injunction barring the platforms from operating unauthorized sports-wagering services in the city and from accepting transactions from Baltimore residents. Additional requested remedies include civil penalties, restitution for affected consumers, and disgorgement of profits allegedly obtained through the challenged activities.

The cases were filed under Baltimore’s Consumer Protection Ordinance. Legal counsel includes attorneys from the Baltimore City Law Department and the firm DiCello Levitt.

As the litigation proceeds, courts will confront the central question of whether sports-linked event contracts constitute federally regulated financial products or state-regulated wagers. The outcome could influence how prediction markets structure offerings, disclosures, and geographic access across the United States.