Baltimore Sues Kalshi, Polymarket, Coinbase, Robinhood and Webull for Unlicensed Sports Betting — First Municipal Lawsuit Against Prediction Markets
Baltimore Mayor Brandon Scott has filed suits naming Kalshi (plus Coinbase, Robinhood, Webull as distributors) and Polymarket for violating the city's Consumer Protection Ordinance. The complaints allege unlicensed sports betting, avoidance of Maryland's 15% gaming tax, 21+ age requirements, and claim that 'combos' function as parlays. Baltimore is the first US municipality to sue prediction market platforms.
Mayor Brandon Scott and the Baltimore City Council filed suits on August 13 in Baltimore City Circuit Court against Kalshi, Polymarket, Coinbase, Robinhood, and Webull — the first municipal legal action against prediction market platforms in the United States. The Kalshi complaint names four defendants: Kalshi plus Coinbase, Robinhood, and Webull as distribution partners that embed Kalshi's event contracts in their own trading apps. The Polymarket complaint names Polymarket directly. Both complaints allege violations of Baltimore's Consumer Protection Ordinance and include eight counts of deceptive and unfair trade. The city seeks penalties, restitution, and an injunction blocking unauthorized sports betting activity.
For UK readers, two elements of the Baltimore complaints are worth noting. First, the distribution-layer theory: by naming Coinbase, Robinhood, and Webull alongside Kalshi, Baltimore is asserting that platforms that embed and distribute prediction market sports contracts share liability for the resulting harms. This is structurally similar to how UK regulators have approached responsible gambling: the Gambling Commission holds operators responsible for third-party distribution arrangements and requires that responsible gambling standards flow through the distribution chain. If Baltimore's theory survives, it extends liability to every app that has integrated prediction market functionality — a much wider defendant pool than direct platform operators. Second, the 'combos as parlays' argument: Baltimore's complaint alleges that multi-leg event contracts on Kalshi and Robinhood — which pay out only if all legs resolve correctly — are functionally identical to parlays, a particularly high-margin and high-loss product category that the UK Gambling Commission has considered restricting under consumer protection frameworks.
The age gap is the clearest jurisdictional complaint. Maryland requires sportsbook bettors to be 21+. Prediction market accounts open at 18, following the commodity trading account standard. Baltimore's Consumer Protection Ordinance provides standing to sue on behalf of residents harmed by deceptive trade practices, and the complaint frames the 21-to-18 differential as a deception: users are not adequately informed that prediction market sports contracts lack the responsible-gambling protections of a licensed sportsbook. The complaint also alleges Kalshi's marketing misleads users about regulatory status, presenting CFTC licensing as equivalent to state gaming oversight when the two regimes differ significantly on self-exclusion, advertising restrictions, and addiction referral obligations.
The tactical choice to file in Baltimore City Circuit Court rather than federal court is significant. State-level litigation in eleven other jurisdictions has been immediately contested on CFTC preemption grounds — Kalshi's core argument that federal DCM licensing displaces state and local gambling law. By filing under a municipal consumer protection ordinance, Baltimore is framing the claim as a local consumer harm issue rather than a gambling regulation dispute, attempting to avoid the preemption argument at first instance. Kalshi and Polymarket will almost certainly remove to federal court, where the Fourth Circuit — which covers Maryland and has not yet ruled on prediction market preemption — will eventually see the question. A Fourth Circuit ruling would add a fourth circuit to the split alongside the Second (two Kalshi appeals), Third (ruled for Kalshi in April), and Sixth (Michigan appeal pending).
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Recent updates
Czech Republic Blocks Kalshi From October 15 — Polymarket Already Blocked Since July
The Czech Ministry of Finance listed Kalshi as an unauthorised gambling operator on September 30, requiring ISPs to block it by October 15. Polymarket was similarly blocked in July 2026. Both major US prediction market platforms are now blocked or under active enforcement in at least six European jurisdictions: Czech Republic, Belgium, France, Romania, Spain, and Germany. European regulators treat prediction market sports contracts as gambling regardless of CFTC regulatory status.
SCOTUS Publishes First Orders List — No Prediction Market Cases Granted Yet
The Supreme Court published its first orders list of the new term on October 2 — three cases granted, no prediction market cases. The absence was expected: Kalshi's response briefs to the New Jersey and Robinhood petitions are still pending. The Court typically conferences petitions a few weeks after all responses are in. Legal observers expect a prediction market cert decision in late October or November 2026.
Kalshi Finalising $1 Billion Raise at $40 Billion Valuation Ahead of IPO
Bloomberg reported on September 30 that Kalshi is finalising a new $1 billion funding round at a ~$40 billion valuation — the company's last planned private round before an IPO expected as early as 2027. Sequoia Capital and Wellington Management lead; Tiger Global and Dragoneer also participating. Kalshi was valued at $11 billion in December 2025 and $22 billion in March 2026 — a near four-fold increase in under a year. Polymarket closed a $1 billion round in September at a $15-20 billion valuation.