Kalshi Moves Baltimore's Gambling Suit to Federal Court One Day After It Was Filed

Kalshi Moves Baltimore's Gambling Suit to Federal Court One Day After It Was Filed

Baltimore sued Kalshi in state court on August 13, 2026. Kalshi got the case out of state court on August 14, 2026.

That one-day turnaround is the actual news. Kalshi Inc. and KalshiEx LLC filed a notice of removal taking City of Baltimore, ex rel. Ebony Thompson v. KalshiEx LLC from the Circuit Court for Baltimore City (No. C-24-CV-26-005532) to the U.S. District Court for the District of Maryland, where it is now No. 1:26-cv-03217, assigned to Judge James Kelleher Bredar. The docket lists the cause as "28:1332 Diversity Action," so the asserted basis is diversity of citizenship rather than any federal gambling question.

What the docket actually says

The sole entry on the federal docket as of the copy reviewed on August 17, 2026 reads: "NOTICE OF REMOVAL from Baltimore City Circuit, case number C-24-CV-26-005532. ( Filing fee $ 405 receipt number AMDDC-12957794), filed by Kalshi Inc., Kalshiex LLC. (Attachments: # 1 Civil Cover Sheet, # 2 Exhibit A - Kalshi City of Baltimore Complaint ...)".

Two details worth noting. The removal was filed by the two Kalshi entities, not by every defendant. And the docket showed no remand motion yet. Under 28 U.S.C. 1447(c), a motion to remand based on any defect other than lack of subject-matter jurisdiction "must be made within 30 days after the filing of the notice of removal." That clock started August 14, 2026, which puts the outside date in mid-September 2026. A challenge to subject-matter jurisdiction itself has no such cutoff.

Baltimore sued the apps, not just the exchange

Most coverage will treat this as a Kalshi story. The complaint caption says otherwise. The 46-page complaint, linked from the city's own press release, names KalshiEx LLC, Kalshi Inc., Robinhood Markets, Inc., Robinhood Derivatives LLC, Webull Corporation, Webull Financial LLC and Coinbase Financial Markets, Inc.

The brokers are not incidental. Counts 3 and 4 are pleaded against Robinhood, Counts 5 and 6 against Webull, Counts 7 and 8 against Coinbase, each under Baltimore's Consumer Protection Ordinance, on the theory that their prediction-market hubs conveyed a "false, deceptive, and misleading impression" that sports-event contracts were lawful in Maryland. The city asks for maximum statutory penalties under Baltimore City Code Art. 2, section 4-3(a), disgorgement, restitution, and an injunction barring the defendants from "accepting transactions from Baltimore residents."

Mayor Brandon M. Scott framed it this way in the city's release: "These companies are running sportsbooks without licenses and betting that a new label will put them above the law."

Why sweeps players should watch this

A city consumer-protection ordinance being aimed at the distribution layer is the transferable part. Sweepstakes casinos depend on the same kind of plumbing: payment processors, app distribution, and marketing partners.

California already wrote that idea into statute. AB 831, Chapter 623, approved by the governor on October 11, 2025, makes it unlawful for "any entity, financial institution, payment processor, geolocation provider, gaming content supplier, platform provider, or media affiliate" to knowingly and willfully support an online sweepstakes game in the state. Baltimore is reaching for a similar result through litigation under an ordinance that already exists, without waiting on a legislature.

What to do right now

Nothing about the August 14 removal forces any platform to stop serving anyone. No injunction has issued, and the case has not been decided.

Practical steps are the same ones we suggest during any enforcement action. Withdraw or redeem balances you do not plan to use soon rather than leaving them parked. Keep your own purchase and redemption records, since restitution claims later depend on documentation you control. And treat "federally regulated" or "not gambling" marketing labels as a company's legal position, not a settled answer. Age and eligibility rules vary by operator, so check the terms for the specific brand you use.

The wider 2026 picture

Baltimore filed two suits on August 13, 2026. The second, against Polymarket entities QCX LLC, Blockratize Inc. and QC Tech LLC, is No. C-24-CV-26-005535 in the same state court. We have not verified whether that case has also been removed.

For sweepstakes brands specifically, the pressure in 2026 has come from state bans and voluntary exits rather than from municipal suits. See our banned-states roundup and the closures tracker for where each brand currently stands. Baltimore adds a third mechanism to watch: a local ordinance pointed at everyone in the payment and app chain, not only at the operator.

Sources

• CourtListener docket, City of Baltimore, ex rel. Ebony Thompson v. KalshiEx LLC, D. Md. No. 1:26-cv-03217: https://www.courtlistener.com/docket/74651201/city-of-baltimore-ex-rel-ebony-thompson-v-kalshiex-llc/
• City of Baltimore press release, August 13, 2026: https://www.baltimorecity.gov/mayor/news-media/press-releases/2026-08-13-mayor-brandon-m-scott-and-the-city-of-baltimore-file-consumer-protection-actions-against-kalshi-and-polymarket-over-illegal-sports-betting-and-prediction-market-gambling
• Kalshi complaint, Circuit Court for Baltimore City No. C-24-CV-26-005532 (PDF linked from the city release): https://dicellolevitt.com/wp-content/uploads/2026/08/Kalshi-City-of-Baltimore-Complaint.pdf
• Polymarket complaint, Circuit Court for Baltimore City No. C-24-CV-26-005535: https://dicellolevitt.com/wp-content/uploads/2026/08/Polymarket-City-of-Baltimore-Complaint.pdf
• 28 U.S.C. 1447, Cornell Legal Information Institute: https://www.law.cornell.edu/uscode/text/28/1447
• California AB 831 (Chapter 623, 2025), bill text: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202520260AB831