Baltimore has sued Kalshi and Polymarket, alleging the prediction market platforms are offering unlicensed sports betting. The lawsuit marks the latest escalation in the conflict between traditional sportsbooks and prediction markets, as states and local governments move to restrict event-contract platforms.

Tests whether local governments can use gambling-licensing laws to block CFTC-regulated prediction markets from offering sports-linked event contracts, with potential to create a patchwork of local restrictions even where federal regulation exists.