Baltimore sues Kalshi and Polymarket

Baltimore has sued Kalshi, Polymarket and their affiliated companies, alleging that their sports prediction markets violate the city’s Consumer Protection Ordinance. Mayor Brandon Scott and the Baltimore City Council filed the lawsuits Thursday, according to GambleRSS, adding Baltimore, Maryland, to the jurisdictions challenging the operators.

Baltimore’s case

The mayor’s office says the companies offer sports betting without the required licenses and misrepresent their products’ legal and regulatory standing. The complaints point to contracts covering game winners, point spreads, player statistics and other outcomes that the city considers comparable to sportsbook wagers.

Baltimore argues that describing those products as event contracts or prediction-market trades lets the companies compete against licensed sportsbooks while avoiding equivalent oversight, taxes, responsible-gambling obligations and consumer safeguards. Scott accused the multibillion-dollar businesses of using terminology to circumvent gambling laws and putting profits ahead of residents and communities.

The litigation follows another gambling-related action by Baltimore this year. In March, the city sued six sweepstakes casinos, alleging that they supplied casino-style games to residents despite Maryland’s prohibition on online casino gambling, GambleRSS reported.

Operators invoke federal oversight

Both companies have previously distinguished peer-to-peer event contracts from conventional sports betting, where sportsbooks set the odds. In its response to Baltimore, Kalshi denied breaching consumer protection laws and said it operates legally under its federal regulator’s exclusive authority. It characterized the lawsuits as a politically motivated attempt to revisit a case already on appeal before the Fourth Circuit and said it would defend itself in court.

Polymarket argued that municipal enforcement conflicts with the Commodity Futures Trading Commission (CFTC) framework governing prediction markets. The company said courts have recognized that markets on CFTC-registered exchanges fall under federal law, rather than differing state and local rules. These are the operators’ legal positions, not findings resolving Baltimore’s allegations.

Separately, GambleRSS reported that Kalshi and Polymarket had flagged 140 suspicious transactions potentially associated with insider trading so far this year. The report did not establish that those transactions involved proven misconduct.

What it means for prediction markets

• Jurisdiction remains central: Baltimore is invoking local consumer protection powers, while the companies maintain that federal regulation governs their markets.
• Sports contracts are the focus: The city’s claims concern whether contracts resembling sportsbook wagers require the same licensing and safeguards as traditional sports betting.
• The Fourth Circuit appeal is relevant: Kalshi links Baltimore’s action to an existing appellate dispute. The reported filings and company responses do not establish an outcome for either proceeding.