FlightAware, a company that offers real-time status and information about flights globally, filed a lawsuit against Kalshi in a New York federal court over the prediction markets platform using its “data and name to run gambling markets on flight cancellations.”
In a Monday filing in the US District Court for the Southern District of New York, the company said that despite repeated demands for Kalshi to stop using its registered trademark and offering bets “verified by FlightAware’s data,” the prediction market has continued to list event contracts based on flight cancellations.
The lawsuit cited authorities’ claims that event contracts on prediction market platforms like Kalshi were “wagers” in violation of state laws, adding that the company’s expansion to trading on commercial flights starting in July was associating FlightAware with activities potentially harming its reputation. FlightAware sought to “stop Kalshi’s illicit behavior before there is any harm to public safety.”
“[T]here was widespread outrage and concern that the markets would incentivize unsafe tactics to impact cancellations, threatening public safety and creating the potential for massive disruption of air travel. Airlines condemned the markets,” said the lawsuit. “And due to Kalshi’s unauthorized use of FlightAware’s data and mark, customers immediately assumed that FlightAware was involved in the scheme.”
Example of flight cancellation event contract citing FlightAware data. Source: Kalshi
The FlightAware lawsuit, while based on trademark infringement, breach of contract, injury to its reputation and unfair competition, is just the latest legal entanglement prediction markets like Kalshi and Polymarket face. Many gaming authorities have petitioned courts to block the companies’ event contracts for residents in what is expected to become a showdown between federal regulators and state officials over alleged illegal gambling practices, usually focused on sports betting.
Related: NY judge denies CFTC motion to halt enforcement action against Kalshi
Cointelegraph reached out to Kalshi for comment on the lawsuit but did not receive an immediate response.
Lawsuit highlights ’incentives for manipulation’ on prediction markets
The FlightAware lawsuit included language pointing out the potential for manipulation among prediction market contracts in which participants have knowledge about events before they become public. Some examples in the news include US President Donald Trump’s teleprompter operator reportedly making $100,000 in Kalshi bets tied to words in his speeches and a US soldier allegedly betting on the removal of Venezuelan President Nicolás Maduro in January, having been given nonpublic information about the military operation ousting him.
FlightAware said that by Kalshi allowing event contracts on flight cancellations, there was not only the potential for manipulation, but also threats to passenger safety.
“A market that allows the public to wager on whether flights will be delayed or cancelled creates an incentive for participants to interfere with air travel—including by causing or contributing to flight cancellations—to profit from their wagers,“ said the lawsuit. “Worse, wagers on flights being timely may incentivize airline, airport, or other aviation workers to cut corners to keep a flight on time.“
Newsletter Predicted’s “State of Prediction Markets – Q2 2026” report said Kalshi and Polymarket collectively controlled more than 90% of all prediction market volume, with the two companies having more than $90 billion in second-quarter notional volume.
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