FlightAware has sued prediction-market operator Kalshi over contracts tied to flight cancellations, alleging that Kalshi used FlightAware data without permission and falsely suggested the two companies had a formal relationship. The lawsuit seeks an immediate court order stopping Kalshi from offering any market connected to FlightAware while the case proceeds.
According to FlightAware’s complaint, Kalshi introduced flight-cancellation contracts last month that allowed users to take positions on whether specific flights would be canceled. FlightAware alleges the contracts relied on its information to settle outcomes and were marketed as being “verified from FlightAware,” despite the flight-tracking company not authorizing the use of its data or brand.
The case places a new pressure point on prediction markets, whose contracts depend on clear and trusted sources for resolving outcomes. A dispute over a market’s designated data source can leave traders uncertain over how a contract will be settled, particularly when the provider whose information is cited challenges the arrangement.
FlightAware alleges misuse of data and trademark
FlightAware’s lawsuit accuses Kalshi of breach of contract, trademark infringement and unfair competition. It asks the court for a temporary restraining order, followed by preliminary and permanent injunctions that would prevent Kalshi from using FlightAware’s name, data or services in connection with its markets.
The complaint alleges that Kalshi did not inform FlightAware before using its information to determine whether flight-cancellation contracts had resolved. FlightAware also argues that Kalshi’s presentation of the markets created the impression of a commercial link or approval that did not exist.
That alleged association lies at the center of the trademark claim. FlightAware’s brand is closely tied to real-time aviation information used by airlines, airports, travelers and businesses. The company argues that being connected to a venue where users trade on disruptions to scheduled travel could damage its reputation and create confusion over its role.
Prediction-market platforms generally need a defined resolution rule for every contract. A flight-cancellation market might use an airline announcement, an airport record, a government database or a commercial tracking provider to determine the final outcome. When the contract’s resolution language points to a commercial provider, the operator may face legal and practical risks if it lacks the right to use that provider’s data.
Complaint raises concerns over aviation disruptions
FlightAware’s filing also objects to the nature of cancellation markets, arguing they could create safety and operational concerns. The company says markets focused on flight disruptions could affect travelers and airline operations, potentially creating incentives around events that are already highly sensitive for passengers and carriers.
Kalshi’s contracts reportedly exclude payouts connected to malicious acts and security-related disruptions. FlightAware nevertheless argues that markets built around cancellations can create risks beyond the terms governing individual payouts, because airline operations are affected by weather, staffing issues, air-traffic restrictions, mechanical events and other fast-moving conditions.
The lawsuit does not allege that Kalshi caused or encouraged any cancellation. Its argument instead focuses on the use of FlightAware data and branding, alongside the potential consequences of turning travel disruptions into tradable outcomes.
A temporary restraining order would be an early procedural test of those arguments. Such orders are designed to preserve the status quo before a court reaches a final decision, and FlightAware would need to persuade the judge that it faces a sufficiently immediate risk of harm without relief.
Data sources become a legal fault line
The dispute shows how data licensing can become central to prediction markets as platforms expand beyond elections, economic releases and sports. Contracts tied to flights, weather, corporate events or other specialized subjects often require granular information that is not easily replaced by a single free public record.
A market operator can write settlement rules around publicly available sources, but that may not always produce a simple answer. Flight data can differ across airline notices, airport updates, aviation databases and commercial trackers, especially during delays, diversions, gate changes or cancellations that are later reversed. The more precise a contract becomes, the more valuable a consistent and authoritative data feed can be.
FlightAware’s challenge could therefore influence how prediction-market platforms structure niche contracts. Operators may need more explicit data agreements, alternative resolution sources, or contract language that avoids suggesting endorsement by a third-party provider. For traders, the practical issue is whether the named source in a market’s rules remains available and uncontested through settlement.
Kalshi faces parallel fights over event contracts
The FlightAware case arrives while Kalshi remains involved in multiple disputes over its event contracts, particularly markets connected to sports. State regulators and courts have been divided over whether federally regulated prediction-market contracts can be offered despite state gambling laws.
New York filed a lawsuit against Kalshi last month alleging that the company was operating an illegal gambling business in the state, according to the supplied account of the case. In July, a Washington court temporarily blocked Kalshi from offering sports-related event contracts there. A Michigan judge earlier issued a temporary restraining order involving sports contracts in that state.
Other rulings have moved in a different direction. A Minnesota judge last month blocked enforcement of a state law that would ban prediction markets, allowing Kalshi and Polymarket to continue operating in Minnesota while litigation continues. A federal judge in Michigan also denied Coinbase’s request for a preliminary injunction related to state enforcement against sports-event contracts, according to the supplied materials.
The FlightAware lawsuit concerns neither sports betting rules nor the state-versus-federal authority dispute. It instead targets a commercial dependency that can affect any prediction market: the right to use the source that determines whether a contract pays out. If FlightAware succeeds in quickly removing its name and data from Kalshi’s cancellation markets, platforms offering specialized contracts may face stronger incentives to secure formal arrangements before putting third-party information at the center of settlement rules.
Interested in prediction‑market regulation? Learn how to avoid key pitfalls in 2026’s evolving landscape in this guide.
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