Key Highlights
- Baltimore sued Kalshi and Polymarket, alleging they offered unlicensed sports betting and misled consumers.
- The city says the platforms offer contracts covering game winners, point spreads, totals, and player performance, similar to traditional sports bets.
- The lawsuit adds to a wider U.S. legal fight over whether prediction markets should be regulated as gambling by states or as financial contracts under federal oversight.
The city of Baltimore has sued Kalshi and Polymarket over sports-related contracts offered to residents, escalating a broader U.S. dispute over whether prediction markets constitute gambling under state law.
Mayor Brandon M. Scott and the Baltimore City Council filed separate lawsuits Thursday in the Circuit Court for Baltimore City, accusing both companies of offering unlicensed sports betting and misleading consumers about the nature and legality of their products.
According to the complaints, the platforms allow users in Baltimore to place contracts on game winners, point spreads, total points, player statistics, and other sports outcomes. The city argues that these products function like bets offered by licensed online sportsbooks.
The Crypto Times reached out to Kalshi and Polymarket for comment but had not received a response at the time of publication
Baltimore says prediction contracts amount to sports betting
Kalshi and Polymarket describe their products as event contracts or prediction-market trades. Baltimore argues that the distinction does not change how the contracts function. The complaints allege that the platforms offer moneyline-style contracts, point spreads, totals, tournament outcomes and player-performance markets. The city says these products closely resemble wagers available through traditional sportsbooks.
Baltimore alleges that offering such contracts without the licenses required under Maryland law amounts to unlawful gambling. The city also argues that the platforms avoid requirements imposed on licensed sportsbooks, including licensing, taxation, responsible-gambling measures and consumer protections.
Lawsuits challenge consumer disclosures
Baltimore is also challenging how Kalshi and Polymarket market their products.
The lawsuits allege that the companies’ marketing could mislead consumers into a false or misleading idea that the products are legal and properly regulated. Baltimore said easy access to the platforms could also put vulnerable people, including young adults and people with gambling problems, at risk of financial harm.
Baltimore is seeking civil penalties and an order stopping the alleged conduct. It is also seeking money back for affected consumers, the return of profits it describes as improperly obtained and other remedies allowed under the city’s consumer protection law.
Baltimore joins broader prediction-market legal fight
Baltimore is not the only city that has filed a lawsuit against the prediction markets.
In June, Kentucky Attorney General Russell Coleman filed lawsuits against Kalshi and Polymarket, accusing them of offering sports betting without following Kentucky’s gambling and licensing rules. The action also included VGW, a major sweepstakes casino operator.
New York then also sued Kalshi on July 31, accusing the company of running an illegal and unlicensed gambling business. State officials asked the court to stop Kalshi’s operations, recover profits and provide restitution to affected consumers.
Kalshi has also pushed back against state efforts to regulate its sports contracts. In Illinois, the company challenged a new state law that would require prediction-market operators offering sports contracts to obtain a gambling license. Kalshi argues that its event contracts fall under federal rules overseen by the Commodity Futures Trading Commission (CFTC).
The dispute centers on whether sports-related prediction contracts should be treated as gambling under state law or as federally regulated financial contracts.
Baltimore’s lawsuits add another local challenge to that unresolved question, while the broader legal fight continues across state and federal courts.
Also Read: Prediction Markets Set New Monthly Record With $50.6B Volume in July
