BALTIMORE — Baltimore's Mayor and City Council are suing international prediction markets Kalshi and Polymarket, accusing them of violating local consumer protection ordinances.
Both platforms allow users to wager on a wide range of current events, sports, and politics, from point spreads and player statistics to election winners.
The City contends each platform amounts to unlicensed betting and gambling which they claim runs afoul of State law.
As an unlicensed entity, the City says the companies are able to skirt oversight and taxation.
“These companies are running sportsbooks without licenses and betting that a new label will put them above the law,” said Baltimore Mayor Brandon M. Scott. “It won’t. Baltimore will not let multibillion-dollar companies put profits over people and harm our communities through illegal gambling.”
In their own defense, the companies argue they're simply offering trades based off prediction trends which falls under federal not State regulations.
On their website's frequently asked questions section, Polymarket clarifies it is "not the house."
"All trades happen peer-to-peer," the website says.
“Kalshi and Polymarket cannot circumvent Baltimore’s consumer protections by repackaging gambling as something else or claiming federal regulation puts them beyond the reach of our laws,” said City Solicitor Ebony M. Thompson.
The question at hand is already being litigated throughout the country.
So far federal courts have split on whether Kalshi and Polymarket can even be regulated by State laws considering they technically fall under the jurisdiction of the Commodity Futures Trading Commission (CFTC) byway of the federal Commodity Exchange Act (CEA).
For example, the federal Third Circuit Court of Appeals barred New Jersey from enforcing its state laws against prediction markets.
Here in Maryland, a federal judge ruled State law can regulate prediction market companies, so in the meantime Polymarket US is unavailable locally. Kalshi, though, remains operational.
This latest suit was filed in Baltimore City Circuit Court, and can be reviewed below.
