FlightAware Sues Kalshi Over Flight-Cancellation Betting Markets

FlightAware has launched a legal attack on prediction-market giant Kalshi, accusing it of using the flight-tracking company’s data, name and trademarks without authorization to operate controversial markets tied to flight cancellations.

The lawsuit, filed Monday in the U.S. District Court for the Southern District of New York, adds another major legal headache for Kalshi as prediction markets face growing scrutiny over whether contracts on real-world events amount to gambling.

FlightAware is seeking unspecified damages, a permanent injunction preventing Kalshi from using its data and trademarks, and a jury trial.

Kalshi Accused of Using FlightAware Data Without Permission

According to the complaint, Kalshi identified FlightAware as a primary source for verifying the outcome of its flight-cancellation contracts. FlightAware says it never authorized that arrangement.

The company alleges Kalshi’s use of its name and data could leave customers with the false impression that FlightAware had approved or participated in the betting markets.

One Kalshi contract seen by Reuters was titled “US flight cancellations for the week ending at 5 pm EDT on 8/14.” The listing stated that its outcome would be “verified from FlightAware.”

FlightAware argues that this use violates its terms, trademarks, and commercial rights. The company also says it previously sent Kalshi a cease-and-desist letter after learning that Kalshi was using its data.

Kalshi had not responded immediately to the requests for comment cited in the reports.

Flight-Cancellation Betting Sparks Bigger Safety Concerns

The legal dispute goes beyond a fight over data licensing. Kalshi introduced markets tied to flight cancellations in July, allowing users to trade contracts based on the percentage of flights canceled during specified periods.

The concept quickly triggered concerns within the aviation industry and beyond. Critics have warned that financial markets tied directly to flight disruptions could theoretically create incentives for individuals to cause or exploit transportation chaos.

FlightAware’s lawsuit echoes those concerns, alleging that such markets could encourage attempts to disrupt air travel for financial gain.

The company had previously indicated that its data could not be used for this purpose and warned that customers violating its terms could face account termination.

Kalshi Faces Growing Regulatory Pressure

The lawsuit arrives as prediction markets experience explosive growth in the United States.

Platforms including Kalshi and Polymarket have expanded from election forecasting into sports, economic indicators, geopolitical events and other real-world outcomes.

Kalshi’s popularity surged following the 2024 U.S. presidential election, when prediction markets attracted enormous attention for their forecasting performance.

But the expansion has also triggered an intense regulatory battle over whether some contracts should be treated as financial products or illegal gambling.

New York Attorney General Letitia James is separately pursuing legal action against Kalshi, arguing that some of its offerings constitute unlawful gambling. Kalshi has disputed efforts to restrict its business.

A New Front in the Prediction-Market War

FlightAware’s lawsuit could pose another significant challenge for Kalshi because it targets the underlying data infrastructure that underpins the settlement of a controversial category of contracts.

The company is asking the court to prevent Kalshi from using FlightAware’s name and information in its financial damages claim.

The dispute also highlights a fundamental question facing the rapidly expanding prediction-market industry: How far can companies go when turning real-world events into tradable financial outcomes?

For Kalshi, the answer could have consequences far beyond flight cancellations. As prediction markets move deeper into everyday life, disputes over data rights, gambling laws, market manipulation and public safety are likely to become increasingly difficult to avoid.

With FlightAware now taking the fight to court, Kalshi’s controversial expansion has encountered yet another legal roadblock.