Flight Data Lawsuit: FlightAware Sues Kalshi Over Unauthorized Cancellation Bets

Woofun AI reports that FlightAware, the operator of the world's largest flight-tracking platform, has initiated legal action against prediction markets platform Kalshi in a New York federal court. The suit centers on allegations that Kalshi utilized FlightAware's proprietary data and trademark without permission to facilitate bets on airline cancellations.

The complaint was filed in the U.S. District Court of the Southern District of New York on Monday, coinciding with the day Kalshi submitted its regulatory filing to the Commodity Futures Trading Commission (CFTC) to list event contracts. These contracts enable users to wager on the percentage of scheduled flights that would be canceled during a specific period,

Woofun AI data shows, FlightAware alleges that Kalshi violated terms barring commercial use of its data, citing a fee AeroApi account registered by a Kalshi employee in 2022. After receiving a cease-and-desist letter, Kalshi denied infringing the FlightAware mark or violating license terms, asserting that its references constituted nominative fair use. Although Kalshi later added a disclaimer stating the markets were not endorsed by FlightAware, the plaintiff argues this does not mitigate the issue since Kalshi continued to claim its data would determine winners and losers.

Beyond intellectual property disputes, FlightAware contends that betting on flight cancellations creates safety risks by providing participants with a financial incentive to influence whether flights are delayed or canceled. While Kalshi identified U.S. Department of Transportation flight data as an alternative source for settling contracts, the platform faces broader regulatory scrutiny. New York sued Kalshi at the end of last month for offering wagers without a gaming license, with similar lawsuits pending in Wisconsin and Nevada.

This litigation tests whether a prediction market may use a third party's data and trademark to settle contracts without a commercial agreement, distinguishing it from state-level regulatory actions. Kalshi did not respond immediately to a request for comment, leaving the legal precedent for data usage in prediction markets unresolved.