Flight-tracking company FlightAware has sued prediction-market platform Kalshi, accusing it of using FlightAware’s data and branding without permission to settle flight-cancellation contracts.
The lawsuit seeks court orders preventing Kalshi from using FlightAware’s information and trademarks in connection with the disputed markets.
Dispute centers on flight-cancellation contracts
FlightAware filed its complaint Monday, alleging that Kalshi launched markets allowing users to trade on whether specific flights would be canceled without first obtaining permission to use its data.
According to the lawsuit, Kalshi identifies FlightAware as the source used to verify contract outcomes. FlightAware argues that it never agreed to have its data determine whether traders receive payouts.
The company is pursuing claims including breach of contract, trademark infringement and unfair competition. It has also requested temporary, preliminary and permanent injunctions against Kalshi’s use of its data and branding.
FlightAware says Kalshi implied a commercial partnership
FlightAware’s concerns extend beyond the underlying data.
The company argues that identifying it as the verification source could make users believe that FlightAware had approved, endorsed or partnered with Kalshi on the prediction markets.
According to the complaint, some customers began associating FlightAware with Kalshi after the markets launched, creating potential reputational issues.
FlightAware also contends that Kalshi is commercially benefiting from its data and brand without authorization.
The disputed contracts allow traders to take positions on whether individual flights will be canceled. Kalshi then uses its designated verification source to determine the outcome and settle the contracts.
FlightAware raises aviation safety concerns
The lawsuit also questions whether prediction markets tied to real-world flight cancellations could create undesirable incentives.
Kalshi excludes certain cancellations caused by malicious or security-related events from payouts, according to the complaint. FlightAware nevertheless argues that financial incentives surrounding flight disruptions could potentially encourage attempts to interfere with aviation operations.
The company warned that such activity could disrupt airlines, strand passengers and create safety concerns.
However, FlightAware has not alleged that anyone has actually interfered with a flight to influence a Kalshi contract. Its argument centers on the potential incentives created by the markets.
The dispute comes as prediction platforms increasingly expand beyond traditional financial and political events into contracts tied to real-world outcomes.
Kalshi faces broader regulatory battles
The FlightAware case arrives as Kalshi is simultaneously fighting several legal disputes over its sports and event contracts.
New York officials have challenged Kalshi’s operations in the state, arguing that certain event contracts constitute unlicensed gambling. Washington authorities have also moved against Kalshi’s sports markets, while Michigan has become another battleground over whether state gambling laws can apply to federally regulated prediction markets.
At the heart of these disputes is a larger jurisdictional question: whether federally regulated prediction markets fall exclusively under federal derivatives oversight or can also be governed by state gambling laws.
Kalshi has maintained that its event contracts fall under the jurisdiction of the Commodity Futures Trading Commission (CFTC).
Courts have reached different conclusions
Legal outcomes have varied across states.
In Minnesota, a federal judge temporarily blocked enforcement of the state’s prediction-market restrictions against federally registered platforms including Kalshi and Polymarket US. The court indicated that federal preemption arguments could have merit, while also noting that individual contracts may require separate legal analysis.
Other courts have taken less favorable positions toward sports-related prediction contracts, allowing state gambling regulations to remain in effect while litigation continues.
The CFTC has generally maintained that derivatives traded on registered prediction-market exchanges fall within its federal jurisdiction, putting the regulator at odds with states seeking greater control over sports and event contracts.
FlightAware case presents a different legal challenge
Unlike the state gambling disputes, FlightAware’s lawsuit is primarily about intellectual property, data usage and commercial rights.
The company is not asking the court to determine whether prediction markets themselves are legal. Instead, it wants Kalshi to stop using FlightAware’s data and branding to operate its flight-cancellation contracts without authorization.
The case therefore adds another layer of legal risk for Kalshi as prediction markets expand into increasingly diverse real-world events.
The outcome could also have broader implications for prediction-market operators that rely on third-party datasets to determine contract outcomes, particularly when those data providers have not explicitly agreed to participate in the markets.
