FlightAware Drops Lawsuit Against Kalshi After Prediction Market Revises Flight Contract Language

FlightAware has voluntarily dismissed its lawsuit against prediction market platform Kalshi, just one day after filing the complaint over flight cancellation contracts. The withdrawal came after Kalshi revised language across at least one affected market, though neither company disclosed any settlement or private agreement.

FlightAware Drops Case After Kalshi Changes Contract Language

FlightAware filed the lawsuit on Monday in the Southern District of New York, accusing Kalshi of using its data and brand name without authorization for event contract settlements. The flight tracking company also sought temporary court restrictions covering the disputed use of its information and trademarks.

The next day, FlightAware withdrew the case through a voluntary dismissal filed with the same federal court. No settlement, agreement, or other arrangement was publicly disclosed, and the court did not issue a final ruling on any of the claims raised in the original complaint.

Before the dismissal, a federal judge had ordered Kalshi to respond to FlightAware's request for temporary restrictions, which centered on alleged trademark misuse and the presentation of flight cancellation information. FlightAware ended the lawsuit before the court could decide whether emergency restrictions should apply.

The dispute highlights an emerging tension for data providers whose publicly available information is used to settle trades on prediction market platforms. Kalshi, which operates as a federally regulated exchange under Commodity Futures Trading Commission oversight, structures its event contracts around real-world outcomes that require third-party data to verify results. Companies like FlightAware, whose flight status feeds are widely used across aviation and travel services, have limited precedent for controlling how their data is referenced when tied to financial instruments.

Kalshi Revises Verification Language on Flight Markets

Following the filing, Kalshi modified the wording on at least one flight cancellation market. The platform had previously named FlightAware directly as the source used to verify contract outcomes. Kalshi replaced that reference with the broader term "Primary Source Agency."

The updated contract still linked users to FlightAware's website for relevant cancellation and delay data. Kalshi also added language clarifying that the data provider had no endorsement or formal relationship with the platform. The revision directly addressed concerns about how users might interpret FlightAware's role in the market.

Kalshi did not publicly explain whether the revised wording was part of any private agreement. FlightAware likewise did not disclose whether the changes resolved its concerns regarding trademarks or data use. The dismissal therefore leaves the original legal arguments unresolved through any formal court judgment.

Kalshi Still Faces Wider State Regulatory Challenges

The FlightAware dispute unfolded as Kalshi continues to battle multiple legal challenges involving sports event contracts. In July, New York authorities sued Kalshi, accusing the company of operating an unlicensed gambling business. Courts in Washington and Michigan have also imposed restrictions on sports-related prediction markets within their respective states.

The Commodity Futures Trading Commission has pushed back against state efforts to restrict federally regulated event contracts. The agency maintains that federal commodities law grants it authority over prediction markets operating under its oversight, creating direct conflicts between federal regulators and several state gaming authorities who view these products as gambling subject to local licensing.

Minnesota has taken a different approach after a federal judge blocked enforcement of its prediction market restrictions. That ruling allowed both Kalshi and Polymarket to continue operating in the state while broader legal disputes proceed.

FlightAware's dismissed case adds to the growing legal pressure surrounding the prediction market sector, as federal and state regulators remain divided over jurisdictional control. The episode also signals that brand and data-usage disputes may surface as a separate category of legal risk for prediction market operators, distinct from the gambling-licensing fights that have dominated the sector so far.