- The City of Baltimore and Mayor Brendan Scott filed lawsuits against Kalshi and Polymarket, alleging illegal sports betting and deception.
- The lawsuits claim the prediction market companies operated unlicensed sports-betting platforms and misled users about the legality of their event contracts.
- The complaints also name Robinhood, Webull, and Coinbase as partners, accusing them of deceptive marketing in Maryland.
- The legal action highlights ongoing conflict between state and federal regulators over whether prediction-market contracts constitute swaps under CFTC authority.
The City of Baltimore and its mayor, Brendan Scott, filed lawsuits against Kalshi and Polymarket on Thursday, alleging the prediction market companies violated local gambling laws. In a press release, the mayor’s office said the platforms operated “illegal, unlicensed sports-betting” and misled users about the “legality and regulatory status of their products.”
The lawsuits center on claims that event contracts on Kalshi and Polymarket amount to unlawful wagers under Maryland state law. “These companies are running sportsbooks without licenses and betting that a new label will put them above the law,” said Scott. “It won’t. Baltimore will not let multibillion-dollar companies put profits over people and harm our communities through illegal gambling.”
Notably, the city’s complaint against Kalshi also named Robinhood, Webull, and Coinbase as partners, accusing all parties of deceptive practices by marketing sports contracts as tradable assets. The legal action represents the latest conflict between U.S. state and federal authorities over prediction markets, with many experts expecting an eventual appeal to the Supreme Court.
The U.S. Commodity Futures Trading Commission (CFTC), under Chair Michael Selig, has argued that event contracts qualify as “swaps” within its jurisdiction, while the Baltimore lawsuits and other state authorities dispute that claim. In response, a Polymarket spokesperson told Cointelegraph: “City-specific action runs counter to the CFTC’s established framework for regulating prediction markets. As courts have recognized, prediction markets on CFTC-registered exchanges are governed by federal law, not a patchwork of state and local rules.”
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