FlightAware sues Kalshi over alleged unauthorized data use for flight cancellation markets

Flight tracking site FlightAware has sued Kalshi, accusing the prediction markets platform of improperly using its data and name to "run gambling markets on flight cancellations."

In a Monday filing, FlightAware alleged that Kalshi operates prediction markets relying on its data while presenting the company as a close partner, which FlightAware said has jeopardized its reputation.

Last month, Kalshi launched markets allowing users to bet on flight cancellations, according to the filing. Specifically, Kalshi stated that the outcomes of those bets are "verified from FlightAware."

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

Safety concerns

FlightAware also raised safety concerns. While Kalshi notes that the contracts exclude payouts for events involving malicious and security-related disruptions, FlightAware said the markets "can strand travelers, disrupt airline operations, and threaten safety."

"There was widespread outrage and concern that the markets would incentivize unsafe tactics to impact cancellations, threatening public safety and creating the potential for massive disruption of air travel," FlightAware said, adding that customers immediately assumed the company was involved in bets on Kalshi.

The lawsuit claims breach of contract, trademark infringement, and unfair competition. FlightAware is also seeking a temporary restraining order as well as preliminary and permanent injunctions barring Kalshi from activities involving the flight-tracking site.

The Block has reached out to Kalshi for comment.

Mounting legal pressure

FlightAware's lawsuit adds to the growing legal challenges facing Kalshi, which has been locked in battles with state regulators over its sports-event contracts.

Last month, New York filed a lawsuit against Kalshi for allegedly running an illegal gambling operation in the state. Also in July, a Washington court granted a request to temporarily block Kalshi from offering sports-related event contracts in the state.

Earlier in the year, a Michigan judge issued a temporary restraining order against Kalshi, blocking the platform from offering sports-related event contracts in the state. 

Minnesota, however, has been an exception. Last month, a Minnesota judge blocked the state from enforcing its new law banning prediction markets, allowing Kalshi and Polymarket to continue operating in the state while litigation proceeds.

More broadly, prediction markets remain a flashpoint. A Michigan federal judge last week denied Coinbase's preliminary injunction request to block state enforcement against sports event contracts.

In response, the Commodity Futures Trading Commission has sued several states to establish federal oversight of the prediction markets sector. Over the past year, the agency has brought complaints against Wisconsin, Illinois, Arizona, Connecticut, New York, New Mexico, Minnesota, and Rhode Island.