Odaily Planet Daily reports that the city of Baltimore and Mayor Brendan Scott have filed lawsuits against Kalshi and Polymarket, accusing both companies of violating local gambling laws and deceptive business practices. The mayor’s office stated on Thursday that the two companies operate “illegal, unlicensed sports betting platforms” and mislead users regarding the legality and regulatory status of their products. The city of Baltimore argues that Kalshi and Polymarket describe event contracts as trading instruments, but these transactions effectively constitute illegal gambling prohibited under state law. The complaint against Kalshi also names Robinhood, Webull, and Coinbase as partners on its prediction market platforms, alleging that these companies market sports contracts as products legally purchasable and tradable in Maryland. The U.S. Commodity Futures Trading Commission (CFTC) and the involved companies contend that event contracts on prediction markets fall under the CFTC’s regulatory definition of “swaps.” Polymarket asserts that prediction markets operated on CFTC-registered exchanges are governed by federal law and should not be subject to state or local regulations. (Cointelegraph)
Baltimore Sues Kalshi and Polymarket Over Unlicensed Sports Betting Platforms
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Summary
Baltimore and Mayor Brendan Scott have filed a lawsuit against Kalshi and Polymarket, accusing them of operating unlicensed sports betting platforms that mislead users about their legal and regulatory status. The complaint names Robinhood, Webull, and Coinbase as partners in promoting these contracts. The CFTC and the firms argue that prediction markets are federally regulated as "swaps," while Polymarket contends that its CFTC-registered platform is subject solely to federal law. This action comes amid increasing regulatory pressure on liquidity and crypto markets. Baltimore also ties the case to Counter-Terrorism Financing (CTF) concerns, citing risks arising from unregulated trading.
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