FlightAware Sues Kalshi Over Flight Cancellation Markets — Alleging Unauthorized Data Use, Trademark Infringement, and Aviation Safety Risk
FlightAware has sued Kalshi over flight cancellation prediction markets that use its data without permission, naming it as the verification source without any commercial agreement. The lawsuit alleges breach of contract, trademark infringement, and unfair competition, and seeks a TRO and injunctions. FlightAware also argues the markets create financial incentives for unsafe interference with aviation. The case introduces a data rights challenge distinct from the state gambling law disputes that have dominated prediction market litigation.
FlightAware, the flight tracking company whose data is used by airlines, airports, and aviation authorities globally, has filed a federal complaint against Kalshi over its flight cancellation prediction markets. Kalshi launched the markets last month, telling users outcomes are 'verified from FlightAware.' FlightAware says it was never consulted and never consented. The complaint alleges breach of contract, trademark infringement, and unfair competition, and seeks a temporary restraining order plus injunctions barring Kalshi from using FlightAware's data and branding for the disputed markets. 'Kalshi never informed FlightAware that it would rely on FlightAware's data to determine the outcome of these betting markets,' the company stated. FlightAware is part of Collins Aerospace, a major US defense and aviation company — the reputational stakes of being associated with a prediction market product without consent are not trivial.
For UK readers, the data rights argument has a direct parallel in sports data regulation. Under the UK Gambling Commission's current framework, operators using official sports data for in-play settlement are expected to source that data through authorised channels — the football leagues' official data licencing arrangements, for instance. The FlightAware case applies the same principle to flight data: if Kalshi uses FlightAware's proprietary tracking information to settle contracts, it cannot do so unilaterally and then name FlightAware in user-facing communications as though the company approved it. The trademark infringement claim is particularly significant in a UK context: UK trading standards and ASA guidelines treat the creation of a false impression of commercial endorsement as an unfair commercial practice, regardless of intent.
The safety argument parallels the wildfire controversy covered last week. Oregon senators warned the CFTC that wildfire betting could incentivize arson; FlightAware argues flight cancellation betting creates incentives for unsafe interference with aviation operations. Kalshi has built in a malicious-act exclusion — contracts do not pay out on cancellations caused by deliberate interference. FlightAware argues this is insufficient: financial incentives around whether individual flights are cancelled exist regardless of the exclusion, and the mechanisms of influence are not all obviously captured by a malicious-act carve-out. The complaint does not allege any actual interference. It is a structural argument about the incentives the contracts create.
The most significant implication of this lawsuit is what it reveals about the data oracle problem. Prediction markets settle based on real-world facts. Those facts come from somewhere — flight data, weather data, sports results, government statistics, clinical trial outcomes. The company or organization that holds that data is not automatically a partner in the prediction market that uses it. Kalshi named FlightAware as its settlement source without a commercial agreement; Polymarket avoided precisely this problem by signing official data partnerships with Genius Sports and Sportradar the week before the FlightAware complaint was filed. If the FlightAware lawsuit succeeds in establishing that prediction markets need formal data agreements to legally name third-party sources in settlement processes, it changes the cost structure of launching new market categories: every new market type requires a commercial data agreement before launch, not after the markets are live and traders have open positions.
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Recent updates
Utah Files Felony Charges Against Kalshi and Its Founders — Second State to Criminally Charge a Platform
Utah filed criminal charges against Kalshi and its two co-founders, Tarek Mansour and Luana Lopes Lara, on October 28 — 13 felonies and a misdemeanour, including a second-degree 'pattern of unlawful criminal activity' count and 12 counts of online gambling promotion. The charges stem from a September sting in which an undercover agent placed 12 sports wagers verified to be in Utah. The CFTC sued Utah the day before to block state enforcement, its tenth such suit. Utah is the second state after Arizona to criminally charge Kalshi, and the first to charge the founders personally. Kalshi called it a 'crazy overreach.'
NBA Names Kalshi and Polymarket Preferred Exchanges — Leaving the NFL Alone in Opposition
The NBA announced on October 26 that it has named Kalshi and Polymarket its 'preferred prediction market exchanges,' signed a non-binding memorandum of understanding with the CFTC on basketball integrity, and expanded its DraftKings deal to include prediction markets — the first league to extend a sportsbook partnership into the category. The exchange deals bar league and team personnel from trading NBA contracts, limit permissible markets, and require sharing suspicious-trading data, in exchange for NBA intellectual property and official data. The NBA joins MLB, the NHL, and MLS as partnered leagues, leaving the NFL as the lone major holdout — and the only league fighting the platforms in court.
CFTC Chair Says Agency Is Watching Prediction Markets for Manipulation Ahead of Midterms
CFTC Chairman Michael Selig said on October 23 that the agency is closely monitoring prediction markets for manipulation ahead of the November 3 midterms, and that it is separately scrutinising oil market trading tied to President Trump's announcements about the war in Iran. Combined midterm open interest on Kalshi and Polymarket stood at $250 million as of October 18, with Kalshi holding 84%. Selig acknowledged the agency often catches political figures trading 'oftentimes after the fact.' The remarks highlight the CFTC's dual role as both the platforms' federal protector and their manipulation watchdog.