TheBlock
Flight tracking firm FlightAware filed suit against prediction-market operator Kalshi on Monday, alleging the company improperly used its flight-tracking data and brand to power gambling markets on flight cancellations. The complaint claims breach of contract, trademark infringement, and unfair competition, and seeks a temporary restraining order plus preliminary and permanent injunctions barring Kalshi from any activity tied to FlightAware. According to the filing, Kalshi told users that the outcomes of its flight-cancellation bets were "verified from FlightAware" without ever notifying or licensing the data from the provider, a portrayal that FlightAware says has jeopardized its reputation.
Why it matters
The lawsuit lands at the worst possible moment for Kalshi, which is already fighting on multiple fronts. New York sued the platform last month for allegedly running an illegal gambling operation, a Washington court granted a temporary block on Kalshi's sports-event contracts in July, and a Michigan judge issued a TRO earlier in the year. A Minnesota judge, however, blocked the state's own ban, letting Kalshi and Polymarket keep operating there while litigation runs on.
FlightAware is also raising a safety argument, warning that prediction markets tied to physical events create a moral hazard where bad actors could attempt to trigger cancellations to settle positions, stranding travelers and disrupting airline operations. Kalshi's contracts exclude payouts for malicious or security-related disruptions, but FlightAware says the public reaction to the markets still damaged its standing and immediately led customers to assume the company was directly involved.
Market impact
Prediction markets remain one of the most legally contested corners of crypto. The CFTC has sued Wisconsin, Illinois, Arizona, Connecticut, New York, New Mexico, Minnesota, and Rhode Island over the past year in an effort to establish federal oversight of the sector, and a Michigan federal judge last week denied Coinbase's bid for a preliminary injunction against state enforcement of sports-event contracts.
Frequently asked questions
-
What is FlightAware alleging Kalshi did?
FlightAware accuses Kalshi of using its flight-tracking data and brand to run prediction markets on flight cancellations without permission, claiming breach of contract, trademark infringement, and unfair competition.
-
What relief is FlightAware seeking?
The complaint asks for a temporary restraining order plus preliminary and permanent injunctions barring Kalshi from activities involving FlightAware's data and brand.
-
Why is FlightAware raising safety concerns?
The company argues that markets tied to real-world flight disruptions could incentivize bad actors to trigger cancellations, stranding travelers and disrupting airline operations, even though Kalshi excludes malicious disruptions from payouts.
-
What other legal pressure is Kalshi facing?
New York sued Kalshi last month for allegedly running an illegal gambling operation, a Washington court temporarily blocked its sports-event contracts in July, and a Michigan judge issued a TRO earlier in the year.
-
How are prediction markets regulated in the US?
The CFTC has filed complaints against Wisconsin, Illinois, Arizona, Connecticut, New York, New Mexico, Minnesota, and Rhode Island over the past year to assert federal jurisdiction. A Minnesota judge blocked the state's ban, while a Michigan federal judge last week denied Coinbase's request for a preliminary…
CryptoSlate
CoinTelegraph
CoinDesk