Baltimore and Mayor Brendan Scott have sued Kalshi and Polymarket, claiming the prediction market operators run "illegal, unlicensed sports betting platforms" and violate local gambling laws and deceptive business practice rules. The mayor's office said Thursday that both companies misled users about the legality and regulatory status of their offerings. Baltimore's complaint contends that Kalshi and Polymarket present event contracts as trading when the transactions are actually a form of gambling prohibited under state law. The lawsuit against Kalshi also names Robinhood, Webull, and Coinbase as partners on its prediction market platform, saying they advertised sports contracts as lawful products for Maryland users. The case also tests regulatory boundaries: the Commodity Futures Trading Commission (CFTC) and the companies involved argue that prediction market event contracts are "swaps" within the CFTC's jurisdiction. Polymarket, in turn, says prediction markets operating on CFTC-registered exchanges fall under federal law and should not be subject to state or local rules.
The city of Baltimore has filed a lawsuit against Kalshi and Polymarket, accusing the two prediction market companies of running "illegal, unlicensed sports betting platforms." The suit, brought jointly by the city and Mayor Brendan Scott, alleges violations of local gambling laws and deceptive business practice rules. The mayor's office said Thursday that the companies misled users about the legal status and regulatory oversight of their products.
In its complaint, Baltimore argues that Kalshi and Polymarket describe event contracts as trading, but the transactions effectively amount to illegal gambling under state law. The suit against Kalshi also names Robinhood, Webull, and Coinbase as partners of its prediction market platform, saying they marketed sports contracts as products that could be lawfully purchased and traded in Maryland.
Jurisdiction sits at the center of the dispute. The Commodity Futures Trading Commission (CFTC) and the companies maintain that prediction market event contracts qualify as "swaps" under CFTC oversight. Polymarket has responded that prediction markets run on exchanges registered with the CFTC are governed by federal law, so state and local rules should not apply.
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