FlightAware has filed a federal lawsuit against Kalshi in New York, seeking to shut down the prediction market platform's flight cancellation contracts. The flight tracking company alleges that Kalshi used its data and brand name without authorization to determine the outcomes of its betting markets.

FlightAware submitted its complaint on August 10 to the U.S. District Court for the Southern District of New York in the case docketed as FlightAware LLC v. Kalshi Inc.. The suit names four Kalshi entities and charges them with breach of contract, trademark infringement under the Lanham Act, and unfair competition.

Kalshi, which operates as a CFTC-regulated designated contract market, allows users to trade event-based contracts tied to real-world outcomes. Last month, the platform introduced contracts allowing users to wager on airport flight cancellations. According to the filing, traders were informed that results would be "verified from FlightAware." However, FlightAware contends it was never notified that its data feed would serve as the basis for resolving those markets.

"Kalshi never informed FlightAware that it would rely on FlightAware's data to determine the outcome of these betting markets," the company stated in its complaint.

FlightAware argues that Kalshi effectively presented the flight tracker as a partner by designating it as the authoritative source for market outcomes. As a result, the complaint says, customers assumed FlightAware had endorsed markets in which it wanted no involvement.

The company is requesting a temporary restraining order along with preliminary and permanent injunctions to bar Kalshi from operating any market tied to FlightAware's data.

While Kalshi's contract rules exclude payouts for cancellations caused by malicious or security-related events, FlightAware warned that the markets "can strand travelers, disrupt airline operations, and threaten safety." The complaint also references "widespread outrage and concern that the markets would incentivize unsafe tactics to impact cancellations."

The RTX Corporation subsidiary told the court that once the contracts went live, travelers immediately assumed FlightAware was involved.

Kalshi had previously suspended plans to list the flight cancellation contracts on July 16, just days before trading was scheduled to begin. The pause followed warnings on social media that bad actors could intentionally disrupt flights to profit from the markets, and FlightAware had also objected to the use of its data.

Kalshi's contracts covered cancellations across an entire airport. The platform prohibited insiders — including TSA agents, airport officials, and union representatives — from participating in the markets.

A Kalshi spokesperson previously called FlightAware's objection "unfounded since the information is in the public domain." Kalshi has not yet issued a public response to the lawsuit.

The litigation adds to Kalshi's mounting legal challenges. New York sued the platform last month over alleged illegal gambling, and courts in Washington and Michigan have moved to halt its sports event contracts. However, a Minnesota judge permitted Kalshi and Polymarket to continue operating while the state pursues its ban through litigation.

Kalshi has reportedly been in discussions to raise funding at a valuation of approximately $40 billion, with annualized trading volume reaching $178 billion. The broader jurisdictional dispute has also drawn in the Commodity Futures Trading Commission (CFTC), which has sued multiple states to assert federal authority over prediction markets. The case reflects a growing tension between prediction market operators, which contend their products are federally regulated derivatives, and state regulators and third parties who argue the platforms skirt gambling and consumer protection laws. The FlightAware dispute extends that friction into a new area: whether prediction markets can leverage proprietary data feeds and established brand names to resolve contracts without explicit licensing agreements.