FlightAware, a global flight-tracking platform, filed a lawsuit against Kalshi in New York federal court, alleging the prediction markets platform used FlightAware's flight data and trademark without permission to facilitate bets on airline cancellations. The suit seeks damages and an injunction.
Kalshi began offering contracts on nationwide and local flight cancellations on July 14, the same day it filed with the Commodity Futures Trading Commission to list the event contracts.
FlightAware claims a Kalshi employee registered for an AeroApi account in 2022. The terms for that account, which provides flight data, barred commercial use by subscribers.
Kalshi responded to a cease-and-desist letter from FlightAware, denying any license violation and asserting its references to FlightAware constituted nominative fair use. It subsequently added a disclaimer to its website saying the markets were not endorsed by FlightAware.
FlightAware said the disclaimer does not resolve the core issue, maintaining that Kalshi continued to claim FlightAware's data would determine the winners and losers of the cancellation contracts.
The lawsuit also raises a safety concern: FlightAware argues that enabling bets on flight cancellations creates a financial incentive for participants to influence delays or cancellations.
Kalshi has identified U.S. Department of Transportation flight data as an alternative source for settling its event contracts, according to FlightAware's complaint.
The New York federal case is separate from other legal challenges Kalshi faces. New York state sued Kalshi late last month, alleging it offers sports and event wagers without a gaming license. Similar lawsuits have been filed against Kalshi and other prediction market firms in at least two other states, including Wisconsin and Nevada.
The FlightAware suit tests whether a prediction market platform can use a third party's proprietary data and trademark to settle contracts without a formal commercial agreement. Kalshi did not respond to a request for comment.
