Baltimore has sued Kalshi and Polymarket over sports-event contracts, arguing that prediction markets are offering unlicensed sports betting to Maryland residents. The city’s case against Kalshi reaches beyond the platform itself, naming Coinbase, Robinhood and Webull as defendants over their roles in distributing Kalshi contracts through their own applications.
Mayor Brandon Scott and the Baltimore City Council filed the consumer-protection lawsuits in Baltimore City Circuit Court on Thursday. The complaints accuse the companies of violating Baltimore’s Consumer Protection Ordinance by facilitating sports wagering without licenses required under Maryland law.
Baltimore is seeking civil penalties, restitution for consumers, disgorgement of proceeds that it alleges were unlawfully obtained, and court orders barring the defendants from offering unauthorized sports betting within the city.
Baltimore targets distribution as well as contract issuance
The Kalshi complaint names Kalshi Inc. and KalshiEX LLC, along with Robinhood Markets, Robinhood Derivatives, Webull Corporation, Webull Financial and Coinbase Financial Markets.
That defendant list gives the case a wider reach than earlier disputes focused solely on the operator behind event contracts. Baltimore alleges that Robinhood, Webull and Coinbase make Kalshi’s sports markets accessible through prediction-market sections of their own apps, allowing customers to trade contracts without moving to Kalshi’s platform.
The city argues that this distribution model does not change the underlying nature of the products. Its complaint says customers can take positions on familiar sportsbook-style outcomes, including which team will win a game, point-spread results and individual player performance.
Under Maryland’s regulated betting framework, licensed sportsbooks must meet state requirements covering areas such as consumer protections, operational oversight and tax obligations. Baltimore alleges that the defendants are offering comparable betting products without participating in that system.
The lawsuit describes Kalshi’s “combos” as a particularly close parallel to parlays, the multi-leg bets widely offered by licensed sportsbooks. A successful parlay generally requires every selected outcome to occur, producing a larger potential payout and a higher chance that the entire wager expires worthless. Baltimore argues that packaging sports contracts in that manner makes them functionally indistinguishable from sportsbook products.
Kalshi has consistently characterized its offerings as federally regulated event contracts rather than gambling products. The Baltimore complaint puts that position before a Maryland court in a consumer-protection case that could test how far a prediction-market operator’s federal framework reaches when contracts resemble conventional sports bets.
Polymarket complaint raises market-making questions
Baltimore filed a separate action against QCX LLC, Blockratize Inc. and QC Tech LLC, which the city collectively identifies as Polymarket.
The city similarly alleges that Polymarket provides sports-event markets that violate Maryland’s sports-betting rules. Its complaint also focuses on how the platform’s markets operate, alleging that Polymarket has an internal market-making operation able to take positions opposite users.
Traditional prediction-market platforms often present themselves as venues where users trade contracts with one another, with prices reflecting the market’s changing estimate of an outcome. Baltimore alleges that Polymarket’s internal trading activity means some customers may instead be trading against an entity affiliated with the platform.
That allegation matters to the city’s consumer-protection theory because a platform acting as a counterparty can resemble the role performed by a bookmaker. The complaint also claims Polymarket’s marketing gives users a misleading impression that sports-related offerings are lawful and regulated in Maryland.
Polymarket did not immediately respond to a request for comment, according to the material provided.
A growing clash over sports prediction markets
The cases arrive as prediction-market companies increasingly offer contracts tied to professional and college sports. The products usually take the form of yes-or-no contracts: a user can buy a position tied to an event such as a team winning a game or a player exceeding a statistical threshold, with the contract’s value settling based on the final result.
For users, the mechanics can look similar to sports betting even where the legal structure differs. Sportsbooks generally accept wagers and set odds under state gambling licenses. Prediction-market operators describe their products as event-based financial contracts, which they argue fall within a federal regulatory regime rather than the state-by-state framework that governs betting.
Baltimore’s lawsuits place the practical effects of that distinction at the center of the dispute. The city alleges that sports contracts offered through prediction markets can reach Maryland users while avoiding the licensing, taxation and oversight obligations imposed on authorized sportsbooks.
The claims also reflect a difficult issue for brokerage-style apps that have added prediction-market access. A platform may view itself as a distributor of federally structured contracts rather than a betting operator, while local governments may see the same feature as a direct channel for unauthorized gambling.
Remedies could affect app-based access
Baltimore has asked the court to stop the alleged conduct, a remedy that could require changes to how sports contracts are made available to users in the city if the court agrees with its interpretation of Maryland law.
The requested restitution and disgorgement also raise financial exposure beyond a simple order to remove products. Consumer-protection actions can seek to return money to affected customers and require defendants to surrender revenue connected to conduct found unlawful.
The cases do not decide whether every event contract is a wager under Maryland law. Instead, Baltimore’s complaints focus on a specific category: contracts tied to sporting events that the city says replicate bets already available through licensed operators.
That narrower approach could give courts a way to assess sports contracts separately from prediction markets involving elections, economic data, entertainment awards or other events. It also leaves open a central question for the industry: whether calling a product a financial derivative is enough to preserve access in states and cities that regulate its practical equivalent as sports betting.
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