FlightAware Sues Kalshi Over Flight Cancellation Markets — Alleging Unauthorized Data Use, Trademark Infringement, and Aviation Safety Risk
Flight tracking company FlightAware has filed suit against Kalshi, accusing it of using FlightAware's data without permission to settle flight-cancellation prediction markets, falsely implying a commercial partnership, and creating financial incentives for unsafe interference with aviation. Kalshi introduced the markets last month, telling users outcomes are 'verified from FlightAware' — without any agreement with the company. FlightAware is seeking a TRO and injunctions to stop Kalshi from using its data and brand. The lawsuit adds a new category of legal challenge: IP and data rights, rather than state gambling law or CFTC jurisdiction.
Flight tracking company FlightAware has filed a federal complaint against Kalshi accusing it of using FlightAware's proprietary flight data without permission to settle prediction market contracts on individual flight cancellations. Kalshi introduced the flight cancellation markets last month, telling users that contract outcomes are 'verified from FlightAware.' FlightAware says it was never asked and never consented. 'Kalshi never informed FlightAware that it would rely on FlightAware's data to determine the outcome of these betting markets,' the company stated in the filing. The complaint alleges breach of contract, trademark infringement, and unfair competition, and seeks a temporary restraining order plus preliminary and permanent injunctions barring Kalshi from using FlightAware's services and branding in connection with the disputed markets.
The trademark infringement claim goes beyond the data use itself. FlightAware argues that by naming the company as the verification source for its flight contracts, Kalshi created the impression that FlightAware had approved or participated in the markets — an impression Kalshi's customers apparently acted on. After the cancellation markets went live, FlightAware says it began receiving inquiries from customers who assumed the tracking company had entered a commercial relationship with Kalshi. That reputational exposure — being associated with a prediction market without consenting to it — is the basis of the trademark and unfair competition claims. FlightAware is used to track commercial and private aviation; its services are used by airports, airlines, and aviation authorities. Association with a prediction market product on flight cancellations, without a formal commercial arrangement, creates the kind of brand adjacency the company did not choose and cannot control.
The safety argument follows the same structural logic that Oregon senators raised about wildfire contracts and that clinical trial researchers raised about drug trial betting. When financial payouts depend on real-world outcomes that participants can influence, there is a potential incentive to manufacture those outcomes. For flight cancellations, FlightAware argues the contracts could encourage 'unsafe efforts to affect whether flights operate as scheduled,' with consequences including stranded travelers, disrupted airline operations, and threatened aviation safety. Kalshi explicitly excludes payouts for cancellations caused by malicious acts or security disruptions — a carve-out designed to remove the direct incentive for sabotage. FlightAware's filing argues the carve-out is insufficient: the contracts still create financial incentives around aviation operations broadly, and the mechanisms by which traders could attempt to influence a flight's cancellation status — false weather reports, fraudulent maintenance claims, interference with ground operations — are not all covered by a malicious-act exclusion. The complaint does not allege that any trader has successfully interfered with a flight. The argument is about the incentive, not a documented act.
The FlightAware lawsuit represents a new category of legal challenge that the prediction market sector has not previously faced at scale. The eleven-state litigation battle is about regulatory jurisdiction — who governs prediction markets. The wildfire and clinical trial controversies are about whether specific market categories should exist. The FlightAware case is a commercial IP dispute: a company whose data is being used as a settlement oracle without authorization is suing to stop it. This problem is structural to how prediction markets work. Every contract that settles based on real-world data needs a data source; naming that source, as Kalshi did with FlightAware, creates an implicit claim about the relationship. Polymarket avoided this problem for sports contracts by securing formal partnerships — official data agreements with Genius Sports (announced August 5) and with Sportradar through the ATP Tour deal (announced August 6). Kalshi's flight cancellation markets appear to have been launched without a comparable official data agreement with FlightAware, creating the exact liability the Polymarket deals were structured to prevent. Whether other Kalshi markets that rely on third-party data for settlement — weather data, economic statistics, government reports — are exposed to similar claims is now an open question.
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Utah filed criminal charges against Kalshi and its two co-founders, Tarek Mansour and Luana Lopes Lara, on October 28 — 13 felonies and a misdemeanor, 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 of 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.
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