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Baltimore sues Kalshi and Polymarket, calling prediction markets illegal sports betting. By Chevall Pryce and Brian Carlton, The Baltimore Sun The Tribune Content Agency August 13, 2026 6:11 PM Gift Article Baltimore City is suing prediction-market companies Kalshi and Polymarket, accusing them of using a legal loophole to offer sports betting in Maryland without complying with state gambling laws. The lawsuit asks a judge to stop the companies from accepting transactions from city residents and to order civil penalties, restitution for customers and the return of profits earned through the alleged violations. The complaint alleges the companies offer transactions that function like sportsbook wagers but label them "event contracts" and "prediction market trades." "These companies are running sportsbooks without licenses and betting that a new label will put them above the law," Mayor Brandon Scott said. "It won't. Baltimore will not let multibillion-dollar companies put profits over people and harm our communities through illegal gambling." Polymarket disputed the city's authority to regulate it. "City-specific action runs counter to the CFTC's established framework for regulating prediction markets," a Polymarket spokesperson said. "As courts have recognized, prediction markets on CFTC-registered exchanges are governed by federal law, not a patchwork of state and local rules." Kalshi also disputed the city's claims, saying it is federally regulated and complies with consumer protection laws. "People use regulated prediction markets like Robinhood, Kalshi and CME because they're neutral, fair and transparent marketplaces," the spokesperson said. "Kalshi spent years getting regulated by the federal government and abides by all applicable regulations, including consumer protection laws. If the Mayor has genuine concerns about guardrails, we're always happy to chat. In the meantime, we will defend these claims in court." Who regulates prediction markets? Baltimore's lawsuits come as a federal appeals court is considering whether Maryland can regulate prediction markets, putting the state at the center of a growing national fight over who has authority over the platforms. In 2025, Kalshi sued Maryland after state gambling regulators ordered it to stop offering sports-related event contracts, calling them unlicensed sports betting. Maryland has argued that the contracts are gambling and therefore subject to state law. A federal judge ruled against Kalshi later that year, declining to block Maryland's enforcement action. Kalshi appealed the decision, and the case is now before the 4th U.S. Circuit Court of Appeals. The court heard arguments in May but had not ruled as of Aug. 13. The legal battle comes as prediction markets have rapidly expanded into sports. Fortune and Gambling Capital estimate that prediction markets accounted for about 27% of legal U.S. sports-betting volume during the World Cup. How the platforms work. Kalshi and Polymarket became prominent in 2024 by allowing users to trade contracts tied to the outcomes of real-life events, including presidential elections, sports games, award shows and live television. Markets have included questions about how many people will be deported during the Trump presidency and what words a sports announcer will say during a broadcast. The companies distinguish themselves from sportsbooks such as DraftKings and FanDuel by describing their platforms as exchanges where users trade event contracts with one another rather than bet against the house. Baltimore's Law Department disputes that distinction. The city's complaint says Polymarket has an in-house market-making operation that can take positions opposite customers and profit from price movements. The Law Department said in the complaint that Polymarket therefore "functions much like a traditional sportsbook, where users effectively trade against the house rather than other bettors." Instead of generating income from customers' losing bets, Kalshi and Polymarket collect transaction fees. Both operate under federal regulatory frameworks, but Baltimore officials argue that federal oversight does not shield their sports contracts from Maryland's gambling laws. That distinction has practical consequences for Maryland customers. Licensed sportsbooks and sports gambling platforms are restricted to people 21 and older in the state, while Kalshi and Polymarket allow people 18 and older to use their platforms. City claims local ordinances were violated. Baltimore's Law Department alleges the companies also violated the Baltimore Consumer Protection Ordinance by making gambling easily accessible while providing misleading information about how their wagers work. "Kalshi and Polymarket cannot circumvent Baltimore's consumer protections by repackaging gambling as something else or claiming federal regulation puts them beyond the reach of our laws," City Solicitor Ebony Thompson said. "The City will continue to use its consumer protection authority to stop deceptive and unlawful conduct and hold companies accountable when they put our residents at risk." Baltimore's counsel argues that the companies' lower age threshold circumvents Maryland gambling laws and could make gambling addiction more likely. Multiple other cities and municipalities are suing Kalshi and Polymarket for similar reasons, including Arizona, Utah and New York. Baltimore has previously sued FanDuel, DraftKings, Stake.us and Chumba Casino over alleged deceptive marketing and gambling-related harm.

UK lawmaker suing Musk's xAI seeks order to stop Grok generating sexualised images. 28 Jul 2026 03:18PM (Updated: 28 Jul 2026 06:30PM) Add CNA as a trusted source to help Google better understand and surface our content in search results. LONDON, July 28: A British lawmaker suing Elon Musk's xAI over fake sexualised images of her created by the Grok AI platform said on Tuesday she was seeking a court order to prevent the chatbot being able to generate non-consensual sexualised images of her. Jess Asato, a member of Britain's governing Labour Party, said last month that users created fake images of her, including a video of her "being chloroformed and prepared for a sexual assault", after she publicly criticised Musk and Grok. She has filed a lawsuit at London's High Court for misuse of private information and breach of data protection laws and alleges the way Grok was designed and trained enabled it to generate sexualised content. Court filings show Asato is seeking an order requiring xAI to "implement effective and permanent technical measures" to ensure Grok cannot create manipulated images of her. Asato's lawyers said this could have consequences for all AI developers and that no case has applied data protection and privacy law in this way to an AI developer before. Musk's xAI, which is part of his rocket and space exploration company SpaceX, did not immediately respond to a request for comment on Asato's allegations. Grok, which is distributed through Musk's social media platform X and is subject to regulatory probes in several countries after an outcry over its use to create non-consensual sexualised images, has not filed a response to the lawsuit. Musk has repeatedly criticised Britain's approach to online regulation, arguing that measures including the Online Safety Act - one of the world's most stringent regimes - risk restricting free speech. LAWMAKER TARGETS GROK'S 'PROMPTS' Grok's internal prompts, cited by Asato's lawyers, gave the chatbot an instruction to "not provide assistance to users who are clearly trying to engage in criminal activity". But Asato's lawyers say the platform was also told it had "no restrictions on adult sexual content or offensive content". Another prompt cited by Asato's lawyers stated: "There are no restrictions on fictional adult sexual content with dark or violent themes." Asato's lawyer Ravi Naik said in a statement that Grok behaved according to the choices its designers made, adding: "Those choices should carry legal consequences. "The remedy our client seeks includes a court order requiring the systems be brought into compliance if xAI refuses to do so." The case comes amid growing concerns about the use of Grok, after xAI in mid-January said it restricted image editing in Grok and blocked users from generating images of people in revealing clothing "where it's illegal". Reuters found in early February that, even after new curbs, Grok continued to generate sexualised images of people even when users explicitly warned that the subjects do not consent. The City of Baltimore sued xAI in March over fake sexualised images generated by Grok, one of several cases brought elsewhere in the U.S. as well as in the Netherlands.