Baltimore Takes Legal Action Against Sports Prediction Markets

cryptonews.ruPublished on 2026-08-13Last updated on 2026-08-13

Abstract

Baltimore and its mayor, Brendan Scott, have filed lawsuits against prediction market platforms Kalshi and Polymarket, alleging they operate as illegal, unlicensed sports betting platforms in violation of local gambling laws. The lawsuits contend that the platforms' event contracts are unlawful wagers under state law, misleading users about their legality. Baltimore specifically named Robinhood, Webull, and Coinbase as partners in the Kalshi suit, accusing all companies of unfair practices by advertising these products as legal in Maryland. The case highlights a growing conflict between state and federal authorities in the U.S., with many expecting it to reach the Supreme Court. The Commodity Futures Trading Commission (CFTC) and the companies argue these event contracts are regulated "swaps" under federal jurisdiction. In response, a Polymarket spokesperson stated that city-level actions contradict the established federal regulatory framework for CFTC-registered prediction markets.

Baltimore and its mayor, Brendan Scott, have filed lawsuits against Kalshi and Polymarket, alleging the companies violated local gambling laws.

In a notice published on Thursday, the Baltimore Mayor's Office stated that the two prediction market platforms operated as "illegal, unlicensed sports betting platforms" and misled users about "the legality and regulated status of their products." The lawsuits challenge Kalshi and Polymarket's interpretation of event contracts: according to the plaintiffs' arguments, such transactions constitute illegal wagers under state law.

"These companies are running sportsbooks without licenses and hoping a new label will put them above the law," Scott stated. "It won't. Baltimore will not allow multibillion-dollar companies to put profits over people and harm our communities through illegal gambling."

Baltimore's lawsuit against Kalshi lists Robinhood, Webull, and Coinbase as partners of the prediction market platform. The city accused all companies of unfair practices: they advertised sports contracts as instruments that could be "legally bought and sold in Maryland."

The legal action against the prediction market companies marks another conflict between state and federal authorities in the United States. Many experts expect the case to reach the Supreme Court. The U.S. Commodity Futures Trading Commission (CFTC), chaired by Michael Selig, and the companies have argued that event contracts on prediction markets constitute "swaps" falling under its regulatory purview. Baltimore's lawsuits, along with statements from other state authorities, challenge this assertion.

"Local-level actions contradict the established CFTC regulatory framework for prediction markets," a Polymarket representative stated in a comment to Cointelegraph regarding the lawsuit. "As courts have recognized, prediction markets on CFTC-registered exchanges are regulated by federal law, not a patchwork of state and local regulations."

Related: Court Stays CFTC Case Against US Service Member Over Prediction Market Bets

Related Questions

QWhat legal action has the city of Baltimore taken against Kalshi and Polymarket, and why?

ABaltimore and its mayor, Brendan Scott, have filed lawsuits against Kalshi and Polymarket, alleging that the companies violated local gambling laws by operating as illegal, unlicensed sports betting platforms and misleading users about the legality of their products.

QWhat specific argument does Baltimore make regarding the contracts offered by Kalshi and Polymarket?

ABaltimore argues that the event contracts offered by Kalshi and Polymarket are illegal wagers under state law, not legitimate financial instruments as the companies portray them.

QAccording to the article, what larger regulatory conflict do the Baltimore lawsuits represent?

AThe lawsuits represent a conflict between state/local authorities and federal regulators. The CFTC claims event contracts on prediction markets fall under its jurisdiction as 'swaps,' while state and local governments like Baltimore challenge this federal oversight.

QWhich major financial platforms are named as partners of Kalshi in Baltimore's lawsuit?

ABaltimore's lawsuit against Kalshi names Robinhood, Webull, and Coinbase as partners of the platform, accusing all companies of unfair practices in advertising sports contracts.

QWhat is Polymarket's defense against Baltimore's lawsuit, as cited in the article?

APolymarket argues that CFTC-registered prediction markets are governed by federal law, not a patchwork of state and local regulations, and that city-level actions contradict the established federal regulatory framework.

Related Reads

KPMG Completes Full Financial Statement Audit of Tether for 2025

KPMG has completed a full financial statement audit of Tether for the fiscal year ending December 31, 2025. Tether, the issuer of the USDT stablecoin, announced that the audit of Tether International, S.A. de C.V. resulted in an unqualified opinion. This means KPMG concluded the financial statements fairly present the company's financial position, in accordance with U.S. accounting rules. Tether reported a reserve surplus of $6.814 billion, meaning its assets exceeded liabilities from issued tokens at year-end. The audit went beyond previous quarterly reserve attestations by examining a broader set of records, controls, and financial reports. KPMG also physically inspected and recounted every gold bar held by Tether. This milestone comes as stablecoins face increased regulatory and market scrutiny over reserve backing and transparency. Tether's CEO, Paolo Ardoino, stated the audit addresses long-standing criticism and sets a new industry standard. Observers will now monitor whether Tether continues with audited reports and if other stablecoin issuers follow suit.

cryptonews.ru2h ago

KPMG Completes Full Financial Statement Audit of Tether for 2025

cryptonews.ru2h ago

Trezor Customer Data Leak: Coins Are Safe, But Phishing Is Inevitable

Trezor, a hardware cryptocurrency wallet manufacturer, reported a data breach at its logistics partner, ShipMonk, affecting around 13,689 customers. The incident, confirmed on August 13, 2026, involved unauthorized access to ShipMonk's systems, which stored order information from May 10 to August 8, 2026. Trezor's own systems and user crypto assets were not compromised. The leaked data varies: for 11,742 customers, full names, email addresses, phone numbers, and delivery addresses were exposed. For 1,947 others, only name, city, and email were leaked. The breach was limited to customers in the US, UK, Sweden, Colombia, Brazil, Italy, and Portugal. Trezor warns affected users of an increased risk of phishing attacks, where malicious actors may use the stolen contact details to impersonate Trezor, banks, or exchanges to steal wallet recovery phrases. All impacted customers have been notified via email. In response, Trezor announced a planned "Anonymous Delivery" feature for the EU (September 2026) and the US (end of 2026), aiming to anonymize logistics data. ShipMonk has not yet issued a public statement on its official website. The analysis highlights this as a recurring industry pattern where third-party logistics vendors become weak links in the supply chain, storing data longer than necessary. Similar incidents, like the 2020 Ledger breach, led to prolonged phishing campaigns. A key question remains whether hardware wallets can ever fully decouple from external logistics risks.

cryptonews.ru2h ago

Trezor Customer Data Leak: Coins Are Safe, But Phishing Is Inevitable

cryptonews.ru2h ago

City of Baltimore goes after prediction markets for sports betting

The City of Baltimore and Mayor Brendan Scott have filed lawsuits against prediction market platforms Kalshi and Polymarket. The city alleges these companies operate illegal, unlicensed sports-betting platforms that mislead users about the legality of their products. Officials argue that event contracts traded on these platforms constitute unlawful wagers under Maryland state law, not legitimate financial instruments. The complaint also names Robinhood, Webull, and Coinbase as partners in these alleged deceptive practices. This action represents a significant clash between state authorities and the U.S. Commodity Futures Trading Commission (CFTC), which asserts regulatory jurisdiction over such markets, classifying event contracts as "swaps." A Polymarket spokesperson countered that the city's lawsuit contradicts the established federal regulatory framework. Legal experts anticipate the conflict may ultimately require a Supreme Court resolution.

cointelegraph2h ago

City of Baltimore goes after prediction markets for sports betting

cointelegraph2h ago

Michael Saylor, the Bitcoin Seller, Makes Controversial Statements About BTC Once Again!

MicroStrategy's Michael Saylor introduced a new framework classifying Bitcoin and digital assets based on financial functions. He defines Bitcoin as "digital capital" at one end of the "money spectrum," characterized by high volatility and high return potential as a superior store-of-value asset. In contrast, stablecoins like USDT are positioned as "digital currency," prized for price stability and transactional utility. Saylor identified intermediate categories: "digital credit" (like STRC) and "digital money," which bridge the gap between Bitcoin's capital properties and stablecoins' currency-like features. He described this entire structure as the "digital financial stack," with Bitcoin serving as the foundational, bearer-asset layer. Using an oil analogy, Saylor argued Bitcoin is valuable itself but becomes far more useful when innovated into credit, money, and currency products. He envisions Bitcoin evolving beyond a store of value to become the fundamental collateral and capital layer for a broader digital finance ecosystem.

cryptonews.ru2h ago

Michael Saylor, the Bitcoin Seller, Makes Controversial Statements About BTC Once Again!

cryptonews.ru2h ago

Token Buyback Volumes Continue to Rise, But Price Lows Keep Falling

The volume of token buybacks continues to grow, but the minimum price level is constantly declining, according to an internal memo by Bitwise CIO Matt Hogan. He argues that most crypto tokens, except Bitcoin, are undervalued as investors are unaware of the revenue now being returned to holders. He highlights the example of Hyperliquid, which has bought back and burned $1.3 billion worth of its $HYPE token. Hogan posits that tokens are beginning to trade based on revenue, similar to stocks and bonds, marking the end of an era where scaling networks provided little token utility. He links token valuation to strengthening protocol revenue, noting that Hyperliquid has earned over $800 million in the past year and spends nearly all fees on $HYPE buybacks. Following this model, protocols like Uniswap and Aave have implemented fee mechanisms to buy back and burn their own tokens. The trend has also affected base chains like Solana and Aptos, which have proposed or enacted higher fee burns. However, the memo acknowledges that reducing token supply has not reliably boosted prices. A Cryptopolitan report found many tokens with regular buybacks still underperformed the market. Even Hyperliquid's upward trend broke, and Pump.fun conducted significant buybacks near token lows. Hogan cautions that token buybacks differ from stock buybacks due to the lack of contractual claims on profits or assets, as governance rules can always be rewritten.

cryptonews.ru3h ago

Token Buyback Volumes Continue to Rise, But Price Lows Keep Falling

cryptonews.ru3h ago

Trading

Spot
活动图片