City of Baltimore Files Lawsuits Against Kalshi, Polymarket

The war over prediction market apps has officially expanded to US cities.

The City of Baltimore filed lawsuits against Kalshi and Polymarket today, accusing the operators of offering an illegal form of gambling. It also alleges that the duo has misled customers into believing it holds licenses it doesn’t actually hold, violating local consumer laws. The lawsuit only addresses the sports markets offered, meaning other market categories would remain available.

“These companies are running sportsbooks without licenses and betting that a new label will put them above the law,” Baltimore Mayor Brandon Scott shared in a press release. “It won’t. Baltimore will not let multibillion-dollar companies put profits over people and harm our communities through illegal gambling”

Baltimore’s lawsuit echoes the arguments made in lawsuits filed by more than a dozen states. However, it is the first city to take legal action against sports prediction markets.

The city is asking the court to order the operators to stop offering sports markets and pay for damages caused to the public health of its residents.

Lawsuit is Symbolic… For Now

Baltimore’s lawsuit is only the latest in an ever-growing line of lawsuits challenging the legality of sports prediction markets. Judges have delivered a mix of rulings, making it likely that the US Supreme Court will ultimately decide on the issue. 

As a result, Baltimore’s lawsuit is largely symbolic. However, that could change in the coming months.

If the courts rule that sports markets are subject to state gambling laws, it will hand victories to most, if not all, of the remaining active lawsuits, which will be ruled in favor of the parties challenging operators like Kalshi and Polymarket. As noted in any thorough Kalshi review or Polymarket review, these platforms face ongoing legal uncertainties that could drastically alter their business models. That means Baltimore would likely win its lawsuit, and potentially receive millions of dollars in damages.

Even if the city’s lawsuit fails, the fact that it filed it is a troubling sign for the prediction industry.  It shows that more local governments are willing to invest resources into taking legal action. It also may inspire other large cities to follow their lead, potentially adding even more lawsuits against the industry’s top options.