Baltimore Sues Kalshi, Polymarket, and Major Brokers
City targets prediction markets and their retail distributors for alleged illegal sports betting
Baltimore's Mayor Brandon Scott and the City Council filed suit against prediction market platforms Kalshi and Polymarket — and named Coinbase, Robinhood, and Webull as co-defendants — alleging the services facilitate illegal sports betting without state authorization, according to The Block.
Why It Matters
This lawsuit represents the most aggressive municipal-level strike yet against CFTC-regulated prediction markets operating in U.S. sports territory. By naming major retail trading platforms — Coinbase, Robinhood, and Webull — the city effectively challenges the entire distribution chain, not just the product originators. A ruling in Baltimore's favor could force those platforms to geo-fence or delist prediction market contracts in Maryland, with other states likely to follow. For bettors, the case raises immediate questions about access and legality of sports-event contracts they may currently hold or trade.
Context
Kalshi and Polymarket operate event contracts regulated by the CFTC, a federal framework that both firms have argued preempts state gambling laws. As of August 2026, Kalshi holds a CFTC designation as a designated contract market (DCM), a legal posture it used to defeat a prior CFTC attempt to block its election contracts. State and municipal regulators disagree that federal commodity law overrides local sports-betting licensing requirements.
What's Next
The case will test whether municipal standing holds in federal court and whether CFTC preemption arguments — already battle-tested at the federal level — can repel a city-initiated challenge. Watch for emergency injunction filings from Baltimore and a preemption motion to dismiss from the defendants.
Gambling involves financial risk. Nothing in this article constitutes legal or betting advice.
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