Baltimore City has sued prediction market operators Kalshi and Polymarket, alleging the companies illegally offer sports betting while avoiding Maryland’s licensing, taxation, and consumer protection requirements.
Last week, Mayor Brandon Scott and the Baltimore City Council filed separate lawsuits against Kalshi, Polymarket, and their affiliated companies in the Baltimore City Circuit Court. The City alleges both companies violated its Consumer Protection Ordinance by offering unlicensed sports wagering and misleading consumers about the legality and regulatory status of their products.
Kalshi and Polymarket allow users to put money on game winners, point spreads, point totals, player statistics, and other sports outcomes. The companies call those transactions “event contracts,” or prediction market trades, but Baltimore City argues they amount to sports wagers under Maryland law.
Maryland law generally prohibits betting or wagering on a race, contest, or other contingency outside authorized forms of gambling.
The State licenses and regulates legal sports wagering separately, with licensed operators subject to requirements covering advertising, data security, consumer protections, and other safeguards.
Baltimore City argues that Kalshi and Polymarket offer many of the same wagers as licensed sportsbooks but do not follow those requirements. The complaints also allege the companies give consumers a false or misleading impression that their sports products operate legally under federal regulation.
The lawsuits come as prediction markets test the boundaries between federal commodities regulation and state gambling laws. As previously reported on Conduit Street, that debate has grown as the platforms move further into sports and offer products that increasingly resemble wagers available through traditional sportsbooks.
Baltimore City seeks to stop the alleged practices and to recover civil penalties, restitution for consumers, profits, and other relief available under the City’s Consumer Protection Ordinance.
Stay tuned to Conduit Street for more information.
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