FlightAware Sues Kalshi Over Unauthorized Use of Flight Data in Cancellation Markets
Key Takeaways
- •FlightAware sued Kalshi for unauthorized use of its data and brand in operating flight-cancellation prediction markets.
- •Kalshi is a federally regulated derivatives exchange overseen by the CFTC and launched flight-cancellation wagering markets in July.
- •Kalshi listed FlightAware as the verification source for market outcomes without obtaining the company's consent, according to the complaint.
- •The lawsuit was filed in the U.S. District Court for the Southern District of New York, with FlightAware seeking damages and injunctive relief.
- •The dispute highlights broader uncertainty around how prediction market platforms license and attribute third-party data for contract settlement.
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Aug 11 (Reuters) — Flight-tracking service FlightAware has filed a lawsuit against prediction markets platform Kalshi, accusing the company of using its data and brand name without authorization to operate what FlightAware describes as "gambling markets on flight cancellations."
In July, Kalshi introduced new markets that allowed customers to wager on flight-cancellation risk. The announcement drew public criticism amid concerns that such markets could create financial incentives for individuals to deliberately disrupt air travel or cause airport closures.
Kalshi operates as a federally regulated derivatives exchange under the oversight of the U.S. Commodity Futures Trading Commission (CFTC), which has allowed it to offer event-based contracts on outcomes ranging from economic indicators to election results. The flight-cancellation markets represent an expansion of that model into real-world operational events, raising novel questions about how prediction platforms source and attribute the third-party data used to settle contracts.
According to FlightAware, Kalshi designated the flight-tracking company as the primary source agency for settling the markets' outcomes, despite never having obtained permission to use its name, data, or trademarks for that purpose. Lawyers for FlightAware argued in the complaint that Kalshi's unauthorized use of its data and brand led customers to assume FlightAware was complicit in the scheme.
The complaint was filed on Monday in the U.S. District Court for the Southern District of New York.
At the time of reporting, Reuters confirmed that a contract titled "US flight cancellations for the week ending at 5pm EDT on 8/14" remained available on Kalshi's website. The listing explicitly stated: "Outcome verified from FlightAware."
Kalshi did not immediately respond to a Reuters request for comment made outside of business hours.
Prediction markets such as Kalshi and Polymarket have surged in popularity since the 2024 U.S. presidential election, when they outperformed traditional pollsters in predicting Republican Donald Trump's victory over Democrat Kamala Harris. Both platforms enable traders and gamblers to bet on a broad range of events, spanning sports outcomes, elections, and developments related to the wars in Iran and Ukraine.
The case underscores a broader tension emerging as the prediction-market industry scales: platforms that settle real-money contracts on external events depend heavily on authoritative data providers, but the legal framework governing how that data is licensed, attributed, and used for settlement remains largely untested.
FlightAware is seeking unspecified damages along with court orders barring Kalshi from further use of its data and name. The company has also requested a jury trial.
(Reporting by Preetika Parashuraman in Bengaluru; Editing by Lincoln Feast.)
