Baltimore Takes Kalshi and Polymarket to Court Over Unlicensed Sports Betting Claims

In addition to state regulators, US cities are now joining the prediction market battle as Baltimore City has filed suit against prediction market operators Kalshi and Polymarket, accusing them of sidestepping state gambling rules by disguising sports wagers as “event contracts” and “prediction trades.”

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The complaint argues that these offerings function in practice like sportsbook bets, even though they are presented under different labels.

Similar to state gaming bodies around the country, city officials are asking the court to block both companies from taking transactions from local residents.

The lawsuit also seeks civil penalties, restitution for customers, and the return of profits earned through what Baltimore describes as unlicensed gambling activity.

“These companies are running sportsbooks without licenses and betting that a new label will put them above the law,” Mayor Brandon Scott said, according to local news outlet The Baltimore Sun. “It won’t. Baltimore will not let multibillion-dollar companies put profits over people and harm our communities through illegal gambling.”

City accuse prediction market operators of misleading ‘gamblers’

Baltimore officials also say Kalshi and Polymarket crossed the line by violating the city’s Consumer Protection Ordinance.

The lawsuit claims the companies made gambling too easy to access while presenting wagers in a misleading way. City Solicitor Ebony Thompson argued that operators cannot escape local rules by rebranding bets as prediction trades or by pointing to federal oversight.

She stressed that Baltimore will continue using its consumer protection powers to stop deceptive practices and hold firms accountable when residents are put at risk.

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The complaint also highlights concerns over age restrictions, noting that the companies’ lower threshold sidesteps Maryland’s gambling laws and could heighten risks of addiction. The current gambling age in the state is 21 and older, but both prediction market platforms allow users aged 18+.

Case follows Kalshi’s ongoing statewide battle

Baltimore’s lawsuit arrives while Kalshi is already locked in a broader fight with Maryland regulators. 

Last year, the company sued the state after being ordered to halt sports‑related event contracts, which officials classified as unlicensed betting. A federal judge later sided with Maryland, refusing to block enforcement. Kalshi appealed, and the case is now before the 4th U.S. Circuit Court of Appeals, which heard arguments in May but has yet to issue a ruling. 

Kalshi reiterated its state claims to Baltimore in its latest response, insisting it complies with consumer protection laws and operates under federal regulation. “People use regulated prediction markets like Robinhood, Kalshi and CME because they’re neutral, fair and transparent marketplaces,” the company said. 

“Kalshi spent years getting regulated by the federal government and abides by all applicable regulations, including consumer protection laws. If the Mayor has genuine concerns about guardrails, we’re always happy to chat. In the meantime, we will defend these claims in court.” 

Polymarket has also pushed back against Baltimore’s claims, arguing that the city lacks authority. “City‑specific action runs counter to the CFTC’s established framework for regulating prediction markets,” a spokesperson said, adding that federally registered exchanges fall under national oversight, not local rules. 

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