Baltimore sues Kalshi and Polymarket for unlicensed sports betting
Baltimore filed lawsuits against Kalshi and Polymarket on August 13, alleging both CFTC-regulated platforms allow residents to wager illegally on sports outcomes. The city claims users bet on game winners, point spreads, and point totals without local gambling licenses. The suits arrive as the Fourth Circuit considers a separate state-level case and as states and localities increasingly try to restrict event-contract platforms despite federal registration.
Baltimore's entry raises the stakes for both platforms' geofencing strategy. Kalshi already faces active gambling suits in Wisconsin, Utah, and New York, where state courts have rejected its federal preemption defense; Polymarket now joins it in the same legal crosshairs for the first time. Each new city or state filing forces a binary choice: block local users and surrender market share, or keep trading and absorb voiding risk on open contracts.
The CFTC's emergency order in New York shows federal regulators trying to backstop contract validity, but it cannot block state injunctions. For traders, geography now determines whether a contract pays out or gets voided retroactively. The Fourth Circuit appeal is the only path to a uniform standard, and that timeline stretches across months or years. Both platforms must now budget for parallel state fights rather than one clean federal resolution.