Baltimore Lawsuit Hits Polymarket and Kalshi Amid Crypto Regulation Push

Summary

• Baltimore filed separate lawsuits against Kalshi and Polymarket on August 13, 2026, claiming unlicensed sports wagering under Maryland law.
• The actions target prediction platforms as they expand while U.S. betting rules remain unclear.
• JPMorgan Chase ended its banking relationship with Polymarket in October 2025 over regulatory concerns.

Baltimore City sued Kalshi and Polymarket in Baltimore City Circuit Court on August 13, 2026. The suits claim the platforms run unlicensed sports wagering. They violate Maryland law on prediction market gambling.

Mayor Brandon M. Scott and the city brought the cases. Prediction markets expand fast while federal and state crypto betting rules stay unresolved.

Context

Prediction markets like Polymarket and Kalshi draw more attention as trading volumes climb. Users bet on event outcomes such as sports and elections. That overlaps with traditional gambling.

Maryland demands specific licenses for sports wagering. The lawsuits test whether state consumer protection rules apply or if federal CFTC oversight takes over instead. Similar questions sit before the 4th Circuit Court of Appeals.

"The lawsuits allege that Kalshi and Polymarket offer sports wagering in Baltimore without the licenses required under Maryland law."

, Mayor Brandon M. Scott and the City of Baltimore (Source)

Details

The complaints say both platforms operate without required approvals. They break local rules on sports betting and consumer protection. City officials argue the contracts act like sports wagers even when framed as prediction markets.

JPMorgan Chase cut ties with Polymarket in October 2025. Sources link the move to regulatory worries about the platform. Earlier scrutiny already added pressure on its U.S. access.

Traders on Polymarket give the CLARITY Act a 21 percent chance of passing in 2026. The bill seeks to clarify crypto and prediction market rules federally. Its uncertain future leaves state actions like Baltimore's as live enforcement options.

Outlook

The cases move ahead in circuit court. The 4th Circuit reviews related sports betting questions at the same time. Platforms insist their products fall under CFTC jurisdiction rather than state gambling statutes.