FlightAware quietly ended a legal fight it had opened barely 24 hours earlier, voluntarily dismissing its action against prediction market operator Kalshi one day after alleging the company misused its flight data and trademark. The abrupt reversal in the FlightAware-Kalshi dispute has raised more questions than answers, even as Kalshi quickly revised the language used on its flight cancellation markets in apparent response to the complaint.

Key takeaways

• FlightAware voluntarily dismissed its lawsuit against Kalshi one day after filing it, ending the case in the U.S. District Court for the Southern District.
• The suit accused Kalshi of improperly using FlightAware’s data and trademark to run flight cancellation markets, which FlightAware described as “gambling markets on flight cancellations.”
• Kalshi changed its market verification language from “verified from FlightAware” to “verified from Primary Source Agency,” and added a disclaimer denying any endorsement.
• Corporate lawyer Ariel Givner said the rapid withdrawal after a requested temporary restraining order typically signals a private settlement.
• The dismissal is a small part of Kalshi’s broader legal battles with states and the CFTC over whether its event contracts are gambling products or federally regulated derivatives.

FlightAware drops lawsuit over flight cancellation markets

FlightAware’s decision to abandon its case came unusually fast. According to a Tuesday filing with the U.S. District Court for the Southern District, the flight-tracking company voluntarily withdrew the action it had filed against Kalshi just one day earlier, ending the dispute shortly after it sought emergency court intervention.

For users and market operators alike, the quick pullback matters less for the narrow flight contracts than for what it suggests about how fast prediction market disputes can escalate when a data source objects to being named in market language. The case also drew attention because it touched on a recurring issue in the sector: whether using third-party data or branding creates a legal problem even when the underlying market is contract-based rather than a conventional sportsbook.

Details of the complaint

The original complaint, filed Monday, accused Kalshi of improperly using FlightAware’s data and trademark to run prediction markets tied to whether flights would be canceled. FlightAware described those products as “gambling markets on flight cancellations.”

At the center of the dispute was how Kalshi sourced and labeled the information behind its contracts. The platform had told users that outcomes were “verified from FlightAware,” naming the company directly in its market terms.

That phrasing made the complaint about more than just data access. It also raised the practical question of how prediction markets describe outside information providers without implying ownership, sponsorship, or endorsement, an issue that can matter in any business that republishes or references third-party operational data.

Temporary restraining order request withdrawn

FlightAware did more than file suit. It also asked for a temporary restraining order that would have barred Kalshi from using its data and branding while the case moved forward. That request never received a hearing.

Once FlightAware dismissed the case, the TRO request ended with it. The dispute was narrowly focused on flight cancellation contracts, a smaller part of Kalshi’s business than the sports and crypto markets that make up much of its trading activity and feature in other legal disputes.

Kalshi changes its verification language

Kalshi moved quickly to revise the language on the affected market pages. The company replaced “verified from FlightAware” with “verified from Primary Source Agency,” while also linking to FlightAware’s website.

The revised text includes a disclaimer distancing the source from any commercial relationship with Kalshi. “This market and these products have not been endorsed by the Primary Source Agency or its affiliates,” the platform says on the relevant pages, adding that references to the agency’s delay and cancellation information are purely descriptive and do not imply any partnership.

That wording change addresses the naming issue raised in FlightAware’s complaint, although it does not publicly confirm whether the companies reached a formal agreement. It does, however, show how quickly market terminology can be adjusted when a dispute centers on attribution rather than the mechanics of the contracts themselves.

Settlement speculation follows rapid dismissal

Neither company has said why the case disappeared so quickly, but corporate lawyer Ariel Givner offered a public reading of the sequence on X. “When a plaintiff drops a case this fast after demanding a TRO, it usually means the parties worked something out privately,” Givner said.

The timing supports that interpretation: a lawsuit filed, an emergency order requested, a language change on Kalshi’s platform, and then a dismissal, all within about a day. Still, nothing in the public record confirms a settlement, and the terms of any private resolution remain unknown.

Kalshi’s broader legal and regulatory battles

The FlightAware dispute lasted about a day. Kalshi’s other legal fights have stretched for months and go to the core of its business model. Across multiple states, courts and regulators are still wrestling with one central question: does federal commodities law govern Kalshi’s event contracts, or do state gambling laws apply?

Those cases matter beyond Kalshi because the answer could shape how prediction markets are treated when they expand into sports, politics, or other real-world outcomes that overlap with traditional gambling categories.

Federal versus state jurisdiction disputes

Kalshi is currently facing restrictions in Washington, Michigan and Nevada, where courts have ordered the company to block residents from accessing certain categories of event contracts while litigation continues.

In Washington, an amended preliminary injunction required Kalshi to install IP address and residency-based blocking by mid-August, with a broader geolocation system due shortly afterward. Kalshi has told the court it blocked Washington customers to avoid daily fines that could reach six figures.

The company has also sought reconsideration, arguing that Washington gave more favorable treatment to a competing exchange operating federally regulated contracts while continuing to restrict Kalshi’s own listings.

Kalshi continues to argue that the Commodity Exchange Act gives the CFTC exclusive authority over contracts listed on registered exchanges, and that state gambling statutes should not apply. Courts have not reached a uniform national answer: some rulings have favored Kalshi’s federal preemption argument, while others have sided with state regulators.

CFTC and state regulator actions

The Commodity Futures Trading Commission has also been pulled into these disputes, at times suing states that try to apply gambling law to federally regulated markets. The conflict between federal oversight in Washington and state attorneys general has made Kalshi’s expansion into sports and political event contracts one of the more closely watched regulatory fights in the prediction market sector.

The outcome could affect more than Kalshi. It may also determine how far state gambling law can reach into any federally registered derivatives exchange offering similar products.

Expansion into crypto perpetual futures

Even while defending itself in court, Kalshi has continued to expand its product lineup. The company has sought CFTC approval for perpetual futures tied to US500 and copper, broadening its CFTC-regulated crypto perpetual offering.

That expansion shows Kalshi’s regulatory disputes have not stopped it from pursuing additional digital-asset derivatives, even as its jurisdictional status remains contested in multiple courtrooms.

FAQ

Why did FlightAware drop its lawsuit against Kalshi so quickly?

FlightAware did not publicly explain the dismissal, but corporate lawyer Ariel Givner said the rapid withdrawal suggests the parties likely reached a private agreement.

What was FlightAware’s main accusation against Kalshi?

FlightAware accused Kalshi of improperly using its flight data and trademark for flight cancellation prediction markets.

How did Kalshi respond to FlightAware’s concerns?

Kalshi changed its market verification language from “verified from FlightAware” to “verified from Primary Source Agency” and added a disclaimer saying there is no endorsement or affiliation.

What broader legal challenges is Kalshi facing in the U.S.?

Kalshi is involved in multiple disputes over whether its event contracts are governed by state gambling laws or federal commodities law, with cases involving the CFTC and state regulators in Washington, Michigan and Nevada.

Article produced with the assistance of artificial intelligence and reviewed by the editorial team.