Baltimore files lawsuits against Kalshi and Polymarket for illegal sports betting practices
BALTIMORE —
The city of Baltimore has initiated legal action against the prediction market platforms Kalshi and Polymarket, alleging that they are operating illegal and unlicensed sports betting services, which contradicts the city’s consumer protection laws.
The lawsuits, submitted to the Baltimore City Circuit Court by Mayor Brandon Scott alongside the Baltimore City Council, assert that these platforms’ sports offerings—such as betting on the Baltimore Ravens’ preseason match against the Philadelphia Eagles—are classified as gambling that requires a gaming license from Maryland.
“Kalshi and Polymarket cannot bypass Baltimore’s consumer protection laws by disguising gambling as alternative activities or asserting that federal regulations exempt them from local legislation,” emphasized Baltimore City Solicitor Ebony Thompson in a statement.
Additionally, Mayor Brandon Scott stated, “Baltimore will not allow multibillion-dollar corporations to prioritize profits over community welfare and engage in illegal gambling practices that could damage our neighborhoods.”
Kurt Nachtman, a partner at Silverman Thompson, commented, “The lawsuit from Baltimore City clearly indicates that what we might refer to as gambling—especially when insider information could be exploited for financial gain—is not acceptable.”
In response, Kalshi has defended its business practices, arguing that it has measures in place to prevent trades by individuals possessing insider knowledge. The company noted that the allegations in Baltimore’s lawsuits are already being contested in federal court.
“The state of Maryland is currently reviewing the matter concerning Kalshi’s sports contracts, and this issue is under appeal at the 4th Circuit,” remarked Robert Denault, Kalshi’s head of enforcement.
Kalshi has previously taken legal action against the state of Maryland following the issuance of a cease-and-desist order from the Maryland Lottery and Gaming Control Commission.
Kalshi expressed its position in a statement to WBAL-TV 11 News Investigates, asserting, “The actions taken by Mayor Scott seem to be politically motivated. We are fully compliant with all consumer protection laws and are operating legitimately under the jurisdiction of our federal regulator. We look forward to contesting these allegations in court.”
Meanwhile, Polymarket also highlighted the role of federal regulations, stating in a message to WBAL-TV 11 News Investigates: “As has been established by the courts, prediction markets operating on (Commodity Futures Trading Commission)-regulated exchanges fall under federal law, and not under a mix of varying state and local regulations.”
Nachtman further noted that a prior Supreme Court decision permits states to have authority over gambling regulations.
“The regulation of gambling is indeed a state issue, not a federal concern. The critical question remains whether these activities qualify as gambling,” Nachtman stated to WBAL-TV 11 News Investigates.
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Officials from the mayor’s office indicated that the lawsuits allege that both Kalshi and Polymarket enable city residents to place bets on various aspects of games, including winners, point spreads, total points scored, player statistics, and other typical wagers found at licensed sportsbooks.
The lawsuits contend that these wagers are disguised as “event contracts” or trades in a prediction market, while effectively functioning as sports betting, according to the mayor’s office.
Furthermore, the lawsuits assert that the platforms compete with legitimate, regulated sportsbooks while evading regulations, taxes, responsible gaming protocols, and consumer protections that licensed operators must adhere to.
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