The city of Baltimore filed lawsuits against prediction market platforms Kalshi and Polymarket, accused of operating unlicensed sports betting, Cointelegraph reported.
In a statement Thursday, Mayor Brendan Scott's office said the two companies operated “illegal unlicensed sports betting platforms” and misled users about the “legality and regulatory status” of their products.
Scott said: “These companies are operating unlicensed sportsbooks and betting that a new label will put them above the law. It won't work. Baltimore will not allow multibillion-dollar companies to put profits above people and harm our communities with illegal gambling.”
The complaint against Kalshi included Robinhood, Webull and Coinbase as partners. The city accused the three companies of deceptive practices for marketing sports contracts as something that could be “legally purchased and traded in Maryland”.
Regulatory dispute
The lawsuits against the prediction platforms represent the latest conflict between U.S. state and federal authorities. Many experts expect the case to end in an appeal to the Supreme Court.
The U.S. Commodity Futures Trading Commission (CFTC), chaired by Michael Selig, and the companies argue that event contracts on these markets are “swaps” under its jurisdiction; Baltimore and other state authorities contest that argument.
In response, a Polymarket spokesperson said: “A specific city action goes against the framework established by the CFTC to regulate prediction markets. As courts have recognized, prediction markets on CFTC-registered exchanges are governed by federal law, not by a patchwork of state and local rules.”
