Baltimore sues Kalshi over alleged illegal sports betting via prediction markets

BALTIMORE — The City of Baltimore filed a lawsuit on Tuesday against Kalshi, a prediction market platform, alleging it operated unlicensed sports betting operations in violation of Maryland gambling laws.

The complaint, filed in the Circuit Court for Baltimore City, names Robinhood Markets, Webull Financial and Coinbase as partners with Kalshi, accusing the platform of engaging in deceptive trade practices. The city claims Kalshi facilitated sports wagering through its prediction markets, which it argues constitute illegal gambling under state law.

Kalshi operates a platform where users can trade contracts tied to the outcomes of sporting events, such as the Super Bowl or NBA Finals. The city contends that these contracts function as sports bets, despite Kalshi’s classification of its platform as a prediction market. Maryland law requires operators of sports betting platforms to obtain a license from the state’s gaming regulator, a requirement the city alleges Kalshi failed to meet.

The lawsuit seeks injunctive relief to halt Kalshi’s operations in Maryland and monetary damages for alleged violations of state consumer protection laws. It also requests civil penalties and restitution for affected users.

Robinhood, Webull and Coinbase were included in the complaint as partners, though the nature of their involvement was not detailed. The platforms have not publicly commented on the allegations. Kalshi has previously stated that its prediction markets are not subject to sports betting regulations, arguing that its contracts are based on the outcome of events rather than wagers on sporting contests.

Maryland’s Attorney General’s office has not yet commented on the lawsuit. The case underscores ongoing regulatory scrutiny of prediction markets and their intersection with sports betting laws.