Mayor Brandon M. Scott and the Baltimore City Council brought the suits under the city's Consumer Protection Ordinance. The core allegation is straightforward: both Kalshi and Polymarket offer wagers on game winners, point spreads, total points, player performance, and tournament results without holding Maryland gambling licenses. Baltimore is seeking civil penalties, cease-and-desist orders, consumer restitution, and disgorgement of profits.

"These companies are running sportsbooks without licenses and betting that a new label will put them above the law. It won't," Mayor Scott said in the city's press release. City Solicitor Ebony M. Thompson echoed that position, saying Kalshi and Polymarket cannot circumvent Baltimore's consumer protections by repackaging gambling products. Lead attorney Adam Levitt of law firm DiCello Levitt, which is representing the city alongside the Baltimore City Law Department, put it plainly: "These companies cannot be permitted to use new terminology and new technology to operate outside consumer protection rules."

As of publication, neither Kalshi nor Polymarket has issued a public statement specifically responding to the Baltimore complaint. Both platforms have consistently argued in other filings that their contracts are federally regulated derivatives and therefore exempt from state gambling law under federal preemption.

Why Coinbase, Robinhood, and Webull Are Named

The inclusion of the three brokerage platforms is the lawsuit's most significant escalation. Baltimore's complaint against Kalshi targets Coinbase, Robinhood, and Webull specifically because each embeds Kalshi's sports event contracts directly inside their apps. Users on those platforms can trade on sporting outcomes without ever visiting Kalshi's own site. By naming the distributors alongside the product originator, Baltimore is signaling that legal liability does not stop at the platform that builds a product; it extends to any platform that integrates it.

This logic has direct consequences beyond the US. Crypto exchanges and fintech apps operating in Africa and South Asia that embed third-party DeFi or prediction market products face the same structural exposure. Under the theory advanced by Baltimore, a platform hosting a product may be treated as a co-operator of that product in the eyes of regulators.

The Scale of the Industry Under Fire

The numbers involved make clear this is not a niche regulatory dispute. Kalshi processed roughly $39.7 billion in total volume over the 12 months ending February 2026, with sports contracts accounting for approximately 87 to 90 percent of that activity. The platform handled more than $1 billion in volume on Super Bowl markets alone. Polymarket, which runs on the Polygon proof-of-stake blockchain and settles trades in USDC (a dollar-pegged stablecoin), reached $10.5 billion in monthly trading volume in March 2026 and recorded 734,000 active traders that same month. ICE valued the company at $9 billion as of October 2025.

Polymarket's exposure to US regulatory action is not new. The platform reached a settlement with the CFTC in 2022 over its offering of binary options contracts to US users and has since restricted access for users in the United States. The Baltimore suit represents a renewed and broadened effort by US jurisdictions to reach the platform through consumer protection channels.

Baltimore's lawsuits are part of a broader wave. More than 20 states and local governments have now filed similar actions. Courts have split on the central legal question: whether prediction market sports contracts are federally regulated financial derivatives under the Commodity Exchange Act, which would preempt state gambling law, or whether they are gambling products subject to state licensing.

That preemption argument has a concrete legal foundation. Kalshi won a landmark federal court case in 2023 against the CFTC over election contracts, establishing that the agency lacked authority to block federally regulated event contracts. The platforms have since extended that federal preemption logic to sports contracts, which is why courts are taking the argument seriously rather than treating it as a purely tactical position.

The Third Circuit ruled in Kalshi's favor in April 2026, treating sports contracts as swaps under federal law. The Ninth Circuit, hearing Nevada's appeal, appeared to lean toward the state. Prediction market traders currently price a 64 percent probability that the US Supreme Court takes up a related case before the end of 2026.

Regional Impact: India Blocks Polymarket, Africa Watches

For readers outside the US, the Baltimore lawsuit is one data point in a rapidly shifting global regulatory picture. India moved first among major non-Western markets: a Ministry of Electronics and Information Technology advisory issued on April 25, 2026 directed internet service providers and VPN services to block Polymarket by May 2026. India had been one of Polymarket's largest non-US markets. As of August 2026, Polymarket remains accessible in Pakistan, Nigeria, and Ghana, where it has active user bases. Kalshi, by contrast, restricts access in Kenya and a range of other African countries.

Nigerian regulators, along with South Africa's Financial Sector Conduct Authority and Kenya's Capital Markets Authority, have been monitoring the US debate. The Baltimore case gives them a concrete example of how a city-level regulator can target not just the product operator but the distribution layer, a model applicable to any local exchange hosting imported financial products.

What Comes Next

Kalshi is already in federal court fighting a cease-and-desist order Maryland issued in 2025. In a notable inversion of the typical regulatory dynamic, the CFTC has filed suit against Arizona, Connecticut, and Illinois (on April 2, 2026) to block those states from enforcing similar restrictions, positioning the federal regulator as an active defender of the platforms rather than a check on them.

The federal agency, currently operating with only one confirmed commissioner, proposed new rules in June 2026 that would permit most sports bets while banning contracts tied to player injuries, referee calls, and other manipulation-prone events. Whether those rules survive the ongoing legal uncertainty is unresolved.

The Baltimore complaints add further pressure on Congress and the courts to clarify who actually regulates this market. With prediction market traders pricing a 64 percent probability that the Supreme Court takes up a related case before the end of 2026, the clearest resolution may ultimately come from the nation's highest court.