Baltimore sues Kalshi and Polymarket over alleged illegal sports betting and consumer law breaches

Baltimore has filed lawsuits against Kalshi, Polymarket and their affiliated companies, saying the prediction market operators were running unlicensed sports-betting platforms and misleading consumers about the legality of the products. For high-risk payment businesses, the interesting part is not the courtroom drama; it is how fast prediction markets are being treated like regulated betting in one city after another.

1. Mayor Brandon Scott and the Baltimore City Council filed the lawsuits on Thursday, according to a release from the mayor’s office. The city says Kalshi and Polymarket violated Baltimore’s Consumer Protection Ordinance by offering illegal, unlicensed sports betting while presenting the products as something else.
2. The complaint says the companies offer betting-style markets on game winners, point spreads, player statistics and other outcomes. Baltimore argues that calling these products “event contracts” or “prediction-market trades” does not change what they function like in practice: competition with regulated sportsbooks, but without the same oversight, taxes, responsible-gambling requirements and consumer protections.
3. Mayor Scott said in the release that Kalshi and Polymarket were operating sportsbooks without licenses and trying to avoid the law by using different terminology for their products. Baltimore framed the case as part of a broader effort to stop multibillion-dollar companies from prioritizing profits over people through illegal gambling.
4. This is not Baltimore’s first gambling-related case this year. In March, the city sued six sweepstakes casinos, alleging they offered casino-style games to residents even though online casino gambling is illegal in Maryland.
5. Both companies pushed back quickly. Kalshi said the lawsuit is an attempt to relitigate a case now under appeal before the Fourth Circuit, called the move “political theater,” and said it is operating lawfully under the exclusive jurisdiction of its federal regulator. Polymarket said city-specific action conflicts with the Commodity Futures Trading Commission (CFTC)’s established regulatory framework for prediction markets.

The practical takeaway for PSPs and acquiring teams is straightforward: when a product can be described as a prediction market in one forum and as sports betting in another, the legal classification risk does not stay neatly inside the product team. It follows the flow of funds, the merchant setup, and the bank’s tolerance for jurisdiction-by-jurisdiction enforcement.