FlightAware sues Kalshi over alleged use of flight data in cancellation betting markets

Traders Union
All News
Crypto
FlightAware sues Kalshi over data

Highlights

FlightAware has sued Kalshi, alleging unauthorized use of its flight data to verify outcomes in flight cancellation betting markets launched last month.
FlightAware seeks immediate restraining orders and injunctions against Kalshi, citing breach of contract, trademark infringement, unfair competition, and raised safety concerns related to contract operations.
The lawsuit compounds Kalshi's regulatory troubles, following recent legal actions in New York, Washington, Michigan, and broader industry pressure involving the Commodity Futures Trading Commission and multiple states.

Lawsuit targets data use and market verification

As reported by The Block, FlightAware says in a Monday court filing that Kalshi uses the flight-tracking company's data to run prediction markets on flight cancellations while portraying FlightAware as a close partner. The complaint says Kalshi launched the markets last month and stated that contract outcomes are "verified from FlightAware," even though FlightAware says it was never informed that its data would be used to determine payouts.

FlightAware alleges breach of contract, trademark infringement, and unfair competition. The company is also seeking a temporary restraining order, along with preliminary and permanent injunctions, to stop Kalshi from activities involving the flight-tracking site.

FlightAware also raises safety concerns over the contracts. While Kalshi says the markets exclude payouts tied to malicious or security-related disruptions, FlightAware argues the products can strand travelers, disrupt airline operations and threaten safety, adding that customers immediately assumed it was involved in the betting activity.

Broader regulatory fights intensify for Kalshi

The lawsuit adds to a wider series of legal and regulatory challenges facing Kalshi over event-based contracts, particularly those tied to sports. Last month, New York sued Kalshi, alleging it was running an illegal gambling operation in the state, and a Washington court in July temporarily blocked the company from offering sports-related event contracts there.

Earlier this year, a Michigan judge also issued a temporary restraining order against Kalshi covering similar contracts. Minnesota has moved in the opposite direction, with a judge last month blocking enforcement of the state's new law banning prediction markets, allowing Kalshi and Polymarket to keep operating there while litigation continues.

Pressure on the sector extends beyond Kalshi alone. A Michigan federal judge last week denied Coinbase's request for a preliminary injunction against state enforcement tied to sports event contracts, while the Commodity Futures Trading Commission has sued several states in an effort to establish federal oversight of the prediction markets industry, including actions involving Wisconsin, Illinois, Arizona, Connecticut, New York, New Mexico and Minnesota.

Our earlier coverage of Kalshi’s CPI prediction markets explained how traders were using the platform to price the likelihood that headline and core inflation would come in at or below economists’ forecasts ahead of the Fed’s September meeting. It also noted that the CPI contract outcomes were set to be verified using official Bureau of Labor Statistics data, highlighting how the choice of verification source underpins trust in these event-based contracts.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.