Baltimore has filed a lawsuit against prediction market operators Kalshi and Polymarket, accusing them of running unlicensed sportsbooks in the city. The suit, brought by Mayor Brandon Scott and the City Council in Circuit Court for Baltimore City, argues the platforms' event contracts are really sports bets under Maryland law.
The City's Argument
The platforms let users bet on game winners, point spreads, point totals, and player statistics — the same products licensed sportsbooks sell. The companies call these event contracts, but Baltimore says they function as sports bets and amount to unlawful gambling. Without a license, the firms skip tax bills, audits, and player-protection rules that regulated operators carry.
The city also points to the platforms' advertising, which suggests their products are lawful and properly supervised. That messaging, the lawsuit claims, draws in inexperienced bettors and problem gamblers who might not realize they're wagering on an unregulated site.
What Baltimore Wants
The city is seeking an injunction that would block transactions from residents. It also wants civil penalties of up to $1,000 per violation per day, restitution for affected consumers, and disgorgement of profits the platforms earned from Baltimore bettors.
That's a broad ask, but the city argues it's necessary to protect residents and level the playing field for licensed sportsbooks that follow the rules.
A Growing Crackdown
Baltimore isn't alone in going after prediction markets. Kentucky's attorney general sued Kalshi and Polymarket in June. Wisconsin's Department of Justice brought lawsuits in April. Nevada halted Kalshi in March. And the New York City Council opened a probe into the industry.
Each case takes a slightly different angle, but the core complaint is similar: these platforms are offering sports betting without a license, and they're doing it at scale.
The Industry's Defense
Prediction markets have leaned on federal preemption as their main legal shield, and it's worked in earlier cases. They argue that their products are regulated by federal commodity law, not state gambling statutes. That defense could be central in Baltimore's case too.
The financial world has shown some caution around these platforms. JPMorgan ended its banking relationship with Polymarket last year amid regulatory concerns, and Polymarket moved to another lender. But JPMorgan kept some ties — it invited Polymarket CEO Shayne Coplan to speak at a Miami conference.
The case now moves through the Circuit Court, where the industry's preemption defense is expected to take center stage. No hearing date has been set yet.
