Flight-tracking service FlightAware is suing prediction markets platform Kalshi, accusing it of using FlightAware's data and name without authorization to run markets on flight cancellations. FlightAware seeks damages and a court order to stop Kalshi's use of its name and data.
The lawsuit highlights potential legal and ethical concerns surrounding prediction markets that use third-party data for settlement, raising questions about data usage rights and the potential for market manipulation.
Flight-tracking service FlightAware has filed a lawsuit against prediction markets platform Kalshi, alleging that Kalshi is using FlightAware's data and name without authorization to operate markets focused on flight cancellations. The lawsuit, filed in the U.S. District Court for the Southern District of New York, claims that Kalshi's unauthorized use of FlightAware's identity and data leads customers to believe FlightAware is involved in the scheme.
Kalshi announced in July that it would offer markets allowing customers to speculate on flight cancellation risks. These markets have faced criticism due to concerns that they could create financial incentives for individuals to disrupt air travel or cause airport closures. FlightAware stated that Kalshi named it as the primary source agency for the settlement of these markets, but that no permission was granted for the use of its name, data, or trademarks.
At the time of reporting, a contract for "US flight cancellations for the week ending at 5pm EDT on 8/14" was available on Kalshi's website, with the outcome stated as "verified from FlightAware." Prediction markets like Kalshi and Polymarket have seen a surge in popularity, particularly since the 2024 U.S. presidential election, where they reportedly outperformed traditional pollsters in predicting outcomes. These platforms allow users to bet on a wide range of events, including sports, elections, and geopolitical conflicts.
FlightAware is seeking unspecified damages and a court order to prevent Kalshi from continuing to use its data and name, in addition to requesting a jury trial.