FlightAware has filed a lawsuit against Kalshi for allegedly misusing its data and trademark for betting on flight cancellations.
Legal Action Highlights Unauthorized Use of Data in Betting Markets
FlightAware, a leading flight-tracking service, has filed a lawsuit against the prediction market platform Kalshi in a New York federal court, alleging unauthorized use of its data and trademark for wagering on flight cancellations.
The lawsuit claims that Kalshi violated an existing licensing agreement with FlightAware and ignored a cease-and-desist notice. Despite adding a disclaimer that its markets were not endorsed by FlightAware, the complaint asserts that Kalshi continued to use FlightAware's data to determine the outcomes of its betting contracts.
This legal battle comes as Kalshi faces scrutiny from several states, including New York, Wisconsin, and Nevada, over its alleged unlicensed gambling operations. The outcome of FlightAware's lawsuit could set significant legal precedents regarding the use of third-party data in prediction markets.
Kalshi launched its betting options for local and national flight cancellations on July 14, coinciding with its submission to the Commodity Futures Trading Commission (CFTC) to list these event contracts. Users can place bets on the likelihood of scheduled flights being canceled within a specified timeframe.
FlightAware maintains that Kalshi had previously accepted terms that restricted the commercial use of its data, which included a paid AeroApi account registered by a Kalshi representative in 2022.
In response to FlightAware's cease-and-desist notice, Kalshi argued that it did not infringe upon FlightAware's license or trademark, claiming that its references to FlightAware constituted nominative fair use. However, FlightAware contends that the disclaimer does not alleviate the situation, as Kalshi continued to rely on its data for determining betting outcomes.
FlightAware also raised concerns that allowing bets on flight cancellations could create safety risks by incentivizing individuals to manipulate flight schedules for profit. The complaint notes that Kalshi has turned to data from the U.S. Department of Transportation as an alternative source for its contracts.
Recently, New York filed its own lawsuit against Kalshi, alleging the platform was offering unauthorized sports and event wagers in the state. Kalshi, along with other prediction market companies, is facing similar legal issues in Wisconsin and Nevada. FlightAware's lawsuit, however, focuses specifically on the legality of using third-party data and trademarks for contract settlements without a commercial agreement.
As of now, Kalshi has not issued a statement regarding the lawsuit.
