Kalshi, the prediction market platform that lets users wager on everything from sports and politics to drug trials, is now in hot water over new markets betting on flight cancellations. Flight-tracking platform FlightAware filed a lawsuit against the company on Monday, alleging that Kalshi used its data and branding without permission.
Kalshi first launched markets allowing users to bet on the number of flight cancellations nationwide and at specific airports last month and, according to the lawsuit, Kalshi used FlightAware’s data to settle those bets, listed the company as the markets’ “Primary Source Agency,” and displayed the company’s registered trademark on their platform.
FlightAware claims it had no idea Kalshi was using its data this way until reporters began reaching out for comment. FlightAware says in the lawsuit that Kalshi signed up for an account that prohibited using its data for commercial purposes, but the company also later updated its terms to specifically ban using the data for betting and prediction markets.
FlightAware says it sent Kalshi cease-and-desist letters after learning about the markets, but Kalshi continued offering them.
As of Tuesday afternoon, at least one of the flight-cancellation markets was still taking bets. The page for a market on “US flight cancellations for the week ending at 5pm EDT on 8/14” no longer appears to display FlightAware’s name. Still, a link on the page for the market’s “Primary Source Agency” leads to FlightAware’s website.
FlightAware is seeking a jury trial, damages, and a court order blocking Kalshi from continuing to use its data and trademarks.
Beyond the fight over its data, FlightAware is also taking issue with the flight-cancellation markets themselves, arguing that they could give people a financial incentive to intentionally cause or influence cancellations.
The complaint says backlash to the prediction markets was immediate.
“Public reaction was swift and severe: there 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,” the lawsuit reads.
Similar concerns have repeatedly come up around Kalshi and its rival Polymarket, particularly around traders that may have inside information or the ability to influence the outcome they are betting on.
Some lawmakers have even introduced a bill that would ban trades on these platforms tied to outcomes that can be manipulated, following high-profile cases of users making large profits on suspiciously timed trades tied to global conflicts.
Kalshi and FlightAware did not immediately respond to requests for comment.
Read the full article here
