The city of Baltimore has launched a legal offensive against prediction market platforms, accusing them of running illegal sports betting operations disguised as event contracts. The lawsuit takes aim at industry heavyweights Kalshi and Polymarket, while also naming brokerage and exchange partners including Robinhood, Webull and Coinbase.
The Allegations
Baltimore's complaint centers on claims that these platforms are violating state gambling laws and engaging in deceptive trade practices. The city argues that offerings marketed as "prediction markets" are functionally equivalent to sports wagering, allowing users to place bets on the outcomes of games and other sporting events without the licensing and consumer protections that regulated sportsbooks must follow.
By framing sports contracts as financial instruments rather than gambling products, the platforms have sought to operate under federal commodities oversight rather than state gambling rules. Baltimore contends that this positioning sidesteps local laws designed to protect residents.
The city says event contracts on sports are just betting slips wearing a Wall Street suit.
The Named Partners
The inclusion of Robinhood, Webull and Coinbase highlights how deeply prediction markets have woven themselves into mainstream financial platforms. These companies have partnered with Kalshi to bring event contracts to their large user bases, giving retail traders easy access to markets on everything from elections to sporting outcomes.
- Kalshi and Polymarket are named as the primary prediction market operators.
- Robinhood, Webull and Coinbase are cited as distribution partners for Kalshi's contracts.
- The complaint alleges violations of gambling statutes and deceptive trade practices.
A Growing Legal Battleground
Baltimore's action adds to a mounting wave of scrutiny facing the prediction market sector. Regulators and officials in several states have questioned whether sports-related event contracts should be treated as gambling, setting up a jurisdictional clash between federal commodities regulators and state authorities.
The outcome could carry significant weight for the industry, which has argued that its products are legitimate financial instruments. A ruling against the platforms in Baltimore could embolden other municipalities to pursue similar claims, potentially reshaping how prediction markets operate across the United States.