Baltimore Sues Prediction Market Operators Over Alleged Illegal Sports Betting
Baltimore has initiated legal action against prediction market operators Kalshi and Polymarket, accusing both companies of offering illegal sports betting within the city.
Mayor Brandon M. Scott and the Baltimore City Council filed separate lawsuits on August 13 in the Circuit Court. The complaints allege violations of Baltimore’s Consumer Protection Ordinance and accuse the companies of misleading consumers regarding the legality and regulation of their products.
The lawsuits claim that Kalshi and Polymarket permit Baltimore residents to wager on game outcomes, point spreads, total scores, individual player statistics, and other events typically found in licensed sportsbooks. While the companies categorize these offerings as “event contracts” or prediction market trades, city officials contend that the nomenclature does not alter the fundamental nature of the products.
According to the filings, neither platform possesses the necessary licenses to offer sports betting in Maryland. The city argues that this allows the companies to compete with regulated sportsbooks while circumventing the oversight, taxation, responsible gambling mandates, and consumer protections applied to licensed operators.
Concerns have also been raised about the promotional strategies employed by these companies. Baltimore alleges that Kalshi and Polymarket market their platforms in a manner that creates a false or misleading impression of legality and proper regulation. The city further asserts that this practice can increase gambling accessibility and expose vulnerable consumers, including young adults and individuals with gambling addictions, to potential financial harm.
Baltimore is seeking civil penalties, injunctive relief, restitution for affected consumers, disgorgement of alleged illicit profits, and other remedies permitted by law.
Both Kalshi and Polymarket are currently involved in other legal and regulatory disputes. Kalshi, for instance, recently faced a lawsuit from New York State Attorney General Letitia James, who sought to halt its operations in the state. Subsequently, the U.S. Commodity Futures Trading Commission invoked its emergency authority to mandate Kalshi’s continued operation in New York after the company requested federal intervention. The CFTC stated that this order followed the platform’s plea for assistance after the state lawsuit was filed in late July.
Kalshi also faced a lawsuit from flight-tracking company FlightAware concerning prediction markets related to flights. FlightAware accused Kalshi of unauthorized use of its data and name to host markets on flight cancellations. However, this case was withdrawn just one day later, with Kalshi’s legal representatives stating the lawsuit was voluntarily dismissed without prejudice against all defendants.
Polymarket has encountered its own set of challenges. JPMorgan Chase ceased providing banking services to the company late last year. Polymarket has since secured services from a different lender, though the identity of this new financial institution has not been disclosed.
Additionally, a separate consumer protection lawsuit has been filed against Polymarket in Washington, D.C. The National Association of Consumer Advocates alleges that the company, its CEO Shayne Coplan, and Chief Marketing Officer Matthew Modabber engaged in “flagrantly deceptive” social media advertising campaigns. These campaigns allegedly promoted Polymarket to American consumers and encouraged betting on a platform that was not technically available in the U.S.
The D.C. complaint also references reports of political influencers endorsing Polymarket’s accuracy without disclosing paid partnerships. It cites a Wall Street Journal investigation that uncovered viral videos using simulated versions of the platform to suggest creators had won bets.
