Baltimore Takes Legal Action Against Prediction Markets Over Sports Wagering Violations
Baltimore's legal complaint targeting gambling regulation violations and misleading business practices names Robinhood, Webull, and Coinbase as collaborators with prediction market operator Kalshi.
Baltimore's municipal government, along with Mayor Brendan Scott, initiated legal proceedings targeting Kalshi and Polymarket based on accusations that these platforms breached regional wagering regulations.
According to a statement released on Thursday by the office of Baltimore's mayor, both prediction market operators ran what authorities characterized as "illegal, unlicensed sports-betting platforms" while providing misleading information to customers regarding the "legality and regulatory status of their products." The legal challenges focus on contentions that question how Kalshi and Polymarket categorize their event contracts, with city officials maintaining that such transactions constitute prohibited wagers according to state legislation.
"These companies are running sportsbooks without licenses and betting that a new label will put them above the law. It won't. Baltimore will not let multibillion-dollar companies put profits over people and harm our communities through illegal gambling."
Brendan Scott, Mayor of Baltimore
Of particular significance, Baltimore's legal filing targeting Kalshi specifically identified Robinhood, Webull and Coinbase as collaborating entities with the prediction market service. Each of these companies faced accusations of engaging in misleading business practices through their promotion of sports contracts as products that can "lawfully be purchased and traded in Maryland."
This recent legal challenge directed at prediction market operators represents the most current confrontation between United States state-level and federal regulatory bodies, with numerous legal analysts anticipating the matter will ultimately reach the Supreme Court for resolution. The US Commodity Futures Trading Commission (CFTC), led by Chair Michael Selig, along with the targeted companies have maintained that event contracts offered on prediction markets constitute "swaps" falling under its regulatory jurisdiction, while the Baltimore legal actions and additional state-level regulators contest this interpretation.
"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."
Polymarket spokesperson