FlightAware Drops Kalshi Case as Flight-Cancellation Market Struggles to Gain Users
FlightAware has voluntarily withdrawn its lawsuit against prediction-market platform Kalshi, ending the case just one day after it was filed in a New York federal court.
The flight-tracking company dismissed the lawsuit without prejudice and did not provide a reason for the move. That designation allows FlightAware to potentially bring the case again in the future.
The withdrawal comes as Kalshi’s flight-cancellation contracts appear to have generated very little trading activity, raising the possibility that limited market demand and criticism surrounding the products influenced the decision.
Kalshi’s Aviation Market Draws Limited Trading
Kalshi reportedly paused its flight-cancellation contracts in July after social media users raised concerns that people could deliberately cause flight disruptions and profit from the resulting contracts.
Trading figures suggest the market has attracted little retail participation. A U.S. flight-cancellation contract running through Aug. 14 had recorded 31,412 contracts traded, with total dollar volume of only about $1,842 and open interest of approximately 1,120 contracts.
The figures are particularly small compared with Kalshi’s broader platform, which has recorded around $148 billion in trading volume this year, according to its data.
FlightAware’s dismissal filing does not indicate whether the companies reached an agreement or whether Kalshi changed its flight markets or the sources it uses to determine contract outcomes.
Neither company immediately responded to requests for comment.
Dispute Centered on Flight Data and Trademark
FlightAware had accused Kalshi of using its flight information and trademark without permission to operate prediction contracts based on airline cancellation rates.
The company sought damages and an injunction covering contracts that allowed traders to speculate on the percentage of flights canceled nationwide or at individual airports.
Kalshi rejected the allegations, arguing that it had not violated FlightAware’s licensing agreement or trademark rights. The company also claimed that its references to FlightAware qualified as nominative fair use.
According to FlightAware’s original complaint, Kalshi had also pointed to U.S. Department of Transportation flight data as an alternative source for settling its contracts.
FlightAware Ends Case Before Kalshi Responds
The lawsuit was withdrawn before Kalshi filed an answer or requested summary judgment. As a result, FlightAware was able to dismiss the action unilaterally under Federal Rule of Civil Procedure 41.
Kalshi introduced its nationwide and local flight-cancellation contracts on July 14, the same day it submitted a regulatory filing to the Commodity Futures Trading Commission seeking to list the products.
The contracts allowed users to speculate on the proportion of scheduled flights that would be canceled during specific periods.
FlightAware’s decision to abandon the lawsuit came one day after the CFTC announced that Kalshi had been ordered to continue operating in New York amid a regulatory dispute involving the prediction-market operator.
Kalshi Faces Broader Prediction-Market Legal Pressure
Kalshi and other prediction-market companies are facing comparable lawsuits in states including Wisconsin and Nevada.
FlightAware’s case was distinct because it focused on the use of third-party information and intellectual property. The lawsuit raised the question of whether a prediction market could rely on another company’s data and trademark to settle contracts without obtaining a commercial agreement.
For now, FlightAware has stepped away from the dispute. However, because the case was dismissed without prejudice, the company retains the option of pursuing its allegations again in the future.
