Baltimore Files Lawsuits Against Kalshi and Polymarket Alleging Unlicensed Sports Betting and Consumer Deception

Baltimore officials have filed lawsuits against Kalshi and Polymarket, accusing both companies of offering sports betting products without required Maryland licenses and misleading consumers on regulatory compliance. The complaints were submitted in Baltimore City Circuit Court by Mayor Brandon Scott and the Baltimore City Council, as reported by World Casino News.

The actions allege violations of Baltimore’s Consumer Protection Ordinance. Contracts tied to game winners, point spreads, point totals and player statistics mirror features of licensed sportsbooks, according to the filings. Baltimore maintains that labeling these as prediction market trades or event contracts does not alter their function as wagers.

Scott said: “These companies are running sportsbooks without licenses and betting that a new label will put them above the law. It won’t. Baltimore will not let multibillion-dollar companies put profits over people and harm our communities through illegal gambling.”

Allegations and Additional Defendants

The lawsuits claim Kalshi and Polymarket bypassed authorization from the Maryland Lottery and Gaming Control Agency, avoiding oversight, taxation and consumer protection standards that apply to licensed operators. City Solicitor Ebony M. Thompson stated: “Kalshi and Polymarket cannot circumvent Baltimore’s consumer protections by repackaging gambling as something else or claiming federal regulation puts them beyond the reach of our laws.”

The Kalshi complaint names additional defendants including Robinhood Markets, Webull Corporation and Coinbase Financial Markets, alleging users access trades directly through those platforms. It also challenges “combos” as similar to parlay wagers. The Polymarket suit highlights the company’s internal market-making operation, where users may trade against the platform rather than solely other participants.

Adam Levitt, founding partner of DiCello Levitt, said: “Allowing prediction-market companies to evade gambling laws would set a dangerous precedent far beyond Baltimore.” Both companies rejected the claims. Kalshi called the suit “political theater by Mayor Scott” and cited its federal regulator. Polymarket stated that city actions run counter to the CFTC framework, with federal law governing registered exchanges.

The dispute follows a December warning from Maryland Lottery and Gaming Control Commission Secretary John Martin that licensed gaming companies risk their licenses by entering prediction markets. Courts in New York, Wisconsin and Utah have denied injunction requests from similar operators. Baltimore seeks civil penalties, restitution, disgorgement of proceeds and injunctive relief.

The Legal Tension Ahead

This filing underscores the friction between CFTC-registered prediction markets and state gambling enforcement. Outcomes here will test whether federal oversight shields operators from local consumer protection claims or whether states can impose licensing requirements on sports-like contracts. Prediction market firms face mounting pressure to resolve these jurisdictional conflicts before expansion triggers further actions.

Reporting: World Casino News

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