Kalshi hit with FlightAware suit over airport cancellation betting markets

FlightAware sued Kalshi in federal court in New York on Monday. The flight tracker is asking a judge to shut down the prediction platform’s flight cancellation contracts, alleging it traded on its data and name without permission.

FlightAware wants the flight bets shut down

FlightAware filed its complaint August 10 in the U.S. District Court for the Southern District of New York, docketed as FlightAware LLC v. Kalshi Inc. The lawsuit names four entities of Kalshi. It alleges breach of contract, trademark infringement under the Lanham Act, and unfair competition.

Last month, Kalshi listed contracts that enable users to bet on airport cancellations. Traders were told results would be “verified from FlightAware,” according to the filing. FlightAware said it was never told its feed would determine those outcomes.

“Kalshi never informed FlightAware that it would rely on FlightAware’s data to determine the outcome of these betting markets,” the company wrote in its complaint.

The complaint contends Kalshi marketed the flight tracker as a partner by pointing to it as the source of truth, and customers assumed FlightAware had signed off on markets it wanted no part of.

FlightAware is seeking a temporary restraining order and preliminary and permanent injunctions to stop Kalshi from operating any market based on the flight tracker.

Kalshi’s contract rules do exclude payouts on cancellations due to malicious or security-related events.

FlightAware says that the markets “can strand travelers, disrupt airline operations, and threaten safety” and cites “widespread outrage and concern that the markets would incentivize unsafe tactics to impact cancellations.”

The RTX Corporation subsidiary told the court that as soon as the bets went live, travelers assumed it was involved.

Kalshi already paused the contracts once

Kalshi had suspended plans to list bets on flight cancellations on July 16. This decision came just days before the bets were scheduled to begin.

Social media users had warned that bad actors could disrupt flights to cash in. Additionally, FlightAware objected to its data being used.

Kalshi’s contracts included cancellations for the whole airport. Insiders, including TSA agents, airport officials, and union officials, were prohibited from trading.

A Kalshi spokesperson said FlightAware’s objection was “unfounded since the information is in the public domain.” Kalshi has not responded publicly to the lawsuit.

New York sued Kalshi last month over what it said was illegal gambling. Courts in Washington and Michigan have moved to stop the sports event contracts on the platform.

However, a Minnesota judge allowed Kalshi and Polymarket to continue operating while the state litigates the ban.

Kalshi has been in talks to raise at a ~$40 billion valuation, with annualized trading volume at $178 billion. The jurisdictional fight has also pulled in the CFTC, which has sued states to insist on federal control over prediction markets.

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