Baltimore sues Kalshi and Polymarket, and pulls Coinbase, Robinhood and Webull in with it

Baltimore filed separate complaints against Kalshi and Polymarket in Baltimore City Circuit Court on August 13, 2026, alleging that their sports-related offerings are unlicensed sports wagering and violate the city's Consumer Protection Ordinance ^{[1] [3]}. The detail that changes the risk calculus is the defendant list: the Kalshi complaint also names Coinbase Financial Markets, Robinhood Markets and its derivatives unit, and Webull Corporation along with Webull Financial as co-defendants ^[2].

That is five named entities across three brokerage groups sitting beside the exchange ^[14]. Until now, the argument over event contracts has been fought between venues and regulators. Baltimore's theory reaches the distribution layer: the city alleges that Coinbase, Robinhood and Webull let users access and trade Kalshi sports event contracts directly inside their own apps and prediction-market hubs, without leaving those platforms ^[5]. If a court accepts that framing, the compliance question for a broker is no longer whether the exchange is federally registered but whether the broker's own app is a point of sale in a jurisdiction that says the product needs a licence.

The contracts at issue cover game outcomes, point spreads, totals and player statistics, the same propositions licensed sportsbooks sell ^[4]. The city also alleges that certain "combo" features offered through Kalshi and Robinhood function much like parlays ^[8], which is a pointed choice: parlay construction is a product decision, and product decisions are harder to disclaim as pass-through order routing. Baltimore says the event-contract label lets the firms avoid state licensing, taxation, responsible-gaming rules and age limits, noting that Maryland requires participants to be 21 while some platforms permit 18-year-olds ^[9].

Against Polymarket, identified through QCX LLC, Blockratize Inc. and QC Tech LLC, the city alleges an internal market-making operation that at times takes positions opposite customers, making it closer to a house-backed sportsbook than a peer-to-peer market ^[10].

The remedies sought are statutory penalties of up to $1,000 per violation, an injunction against offering unauthorized sports wagering to Baltimore residents or accepting their transactions, restitution and disgorgement ^[11]. No aggregate figure is stated, so the size of the exposure turns entirely on how a violation gets counted, per trade, per account or per day ^[15]. Mayor Brandon Scott said the companies "are running sportsbooks without licenses and betting that a new label will put them above the law" ^[6], and City Solicitor Ebony Thompson said operators cannot escape local consumer protections by recharacterising gambling or invoking federal oversight ^[12].

Kalshi called the suits political theater and an attempt to relitigate issues already on appeal before the Fourth Circuit, and says it operates lawfully under exclusive CFTC jurisdiction while meeting consumer-protection requirements ^[13]. Polymarket has argued that prediction markets on CFTC-registered exchanges are governed by federal law rather than a patchwork of state and local rules ^[7].

Watch whether the brokers move to be dismissed on the same federal preemption grounds as the exchange or seek separation from it, since their defence is not identical to Kalshi's. Watch the Fourth Circuit appeal Kalshi cites ^[13], which will shape how much room a city ordinance has. And watch the parlay-style combo features ^[8]: if distribution plus product design is the hook, the cheapest response for a broker is to switch off the feature in one city rather than argue about jurisdiction.