Baltimore sues Kalshi and Polymarket, roping Coinbase, Robinhood and Webull into the fight

Quick Take

• Baltimore's Kalshi lawsuit also names distribution partners Coinbase, Robinhood and Webull as defendants.
• The city is seeking penalties, restitution and an order blocking unauthorized sports betting.

Baltimore, the most populous city in Maryland, has sued prediction market operators Kalshi and Polymarket over allegations that their sports-event contracts amount to illegal gambling, with the city's case against Kalshi also pulling its distribution partners Coinbase, Robinhood and Webull into the mix.

Mayor Brandon Scott and the Baltimore City Council filed the lawsuits Thursday in Baltimore City Circuit Court. The complaints allege the companies violated the city's Consumer Protection Ordinance by offering sports betting without proper state licenses.

The city contends that Kalshi and Polymarket offer the same kinds of wagers as licensed sportsbooks, including game winners, point spreads and player performance contracts. The suits also claim that these platforms skirt state oversight, taxation and other consumer protections that licensed operators are required to abide by.

"These companies are running sportsbooks without licenses and betting that a new label will put them above the law," Scott said. "It won't."

Baltimore vs Kalshi

While the city filed separate complaints against Kalshi and Polymarket, the Kalshi case is a bit broader. Alongside Kalshi Inc. and KalshiEX LLC, the complaint names Robinhood Markets, Robinhood Derivatives, Webull Corporation, Webull Financial and Coinbase Financial Markets as defendants.

Baltimore alleges the three partnered platforms offer Kalshi event contracts directly through their respective prediction market segments, allowing users to trade sports contracts without leaving the Coinbase, Robinhood or Webull apps.

The complaint includes eight counts of deceptive and unfair trade against the four platforms while also arguing that "combos" offered on Kalshi and Robinhood function like parlays offered by traditional sportsbooks.

A Kalshi spokesperson defended the company's federal regulatory status and said it would fight the lawsuit.

"People use regulated prediction markets like Robinhood, Kalshi and CME because they're neutral, fair and transparent marketplaces," the spokesperson told The Block. "Kalshi spent years getting regulated by the federal government and abide by all applicable regulations, including consumer protection laws."

"If the Mayor has genuine concerns about guardrails, we're always happy to chat," the spokesperson added. "In the meantime, we will defend these claims in court."

Blurring the lines

The Polymarket complaint names QCX LLC, Blockratize Inc. and QC Tech LLC, which the city collectively refers to as Polymarket.

Baltimore alleges that Polymarket blurred the lines between a prediction market and a sportsbook by establishing an internal market-making team that can take positions against its users, meaning that in some cases, customers may be trading against the house rather than against one another.

Similar to the Kalshi lawsuit, this one also alleges that Polymarket's marketing creates the misleading impression that its offerings are lawful and regulated.

"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," City Solicitor Ebony Thompson said.

Baltimore is seeking maximum statutory penalties, restitution for affected customers and disgorgement of proceeds it alleges were obtained unlawfully. It also wants the court to block the platforms from offering unauthorized sports betting to Baltimore residents.

Polymarket did not immediately respond to a request for comment.

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