FlightAware has voluntarily dismissed its lawsuit against prediction market operator Kalshi just one day after accusing the company of improperly using its flight data and trademark for cancellation contracts.
Summary
- FlightAware voluntarily dismissed its lawsuit against Kalshi just one day after filing the case.
- The lawsuit accused Kalshi of improperly using FlightAware data and trademarks for flight cancellation markets.
- Kalshi changed its market language from “verified from FlightAware” to “verified from Primary Source Agency.”
- Corporate lawyer Ariel Givner said the rapid dismissal could mean the parties reached a private agreement.
According to a Tuesday filing with the U.S. District Court for the Southern District, FlightAware voluntarily withdrew the legal action that it had brought against Kalshi on Monday, ending the case shortly after seeking emergency court intervention.
The flight-tracking company had also requested a temporary restraining order that would have barred Kalshi from activities involving FlightAware while the dispute was being considered. The request did not proceed after the company dismissed the case.
FlightAware did not provide a public explanation in the supplied filing for why it withdrew the lawsuit so quickly. Corporate lawyer and Givner Law founder Ariel Givner said on X that such a rapid withdrawal after seeking a temporary restraining order can point to a private resolution between the parties.
“When a plaintiff drops a case this fast after demanding a TRO, it usually means the parties worked something out privately,” Givner said.
FlightAware lawsuit had targeted Kalshi’s cancellation markets
Filed Monday, FlightAware’s complaint accused Kalshi of improperly using its data and trademark to operate prediction markets tied to whether flights would be canceled.
The dispute centered in part on how Kalshi described the source used to settle its flight-related contracts. Kalshi had previously told users that outcomes for the markets were “verified from FlightAware,” directly naming the flight-tracking company in the market terms.
FlightAware objected to Kalshi’s use of its name and information and sought a temporary restraining order as part of the lawsuit. The company characterized Kalshi’s products as “gambling markets on flight cancellations,” according to the complaint.
Kalshi has since changed the wording used on the affected market pages. Instead of saying outcomes are verified by FlightAware, the platform now states that they are “verified from Primary Source Agency,” while providing a link directing users to FlightAware’s website.
The revised language also contains a disclaimer separating the source used to determine an outcome from any commercial relationship with Kalshi.
“This market and these products have not been endorsed by the Primary Source Agency or its affiliates,” Kalshi states on one of the market pages.
Kalshi added that references to the agency’s delay and cancellation page or associated marks are descriptive and do not represent an endorsement or affiliation between the source and the prediction market operator.
The wording change addresses one of the issues raised in the short-lived dispute without identifying FlightAware by name in the verification language. Neither the voluntary dismissal nor the revised market terms, however, establishes publicly whether the two companies entered into a settlement or another agreement.
Kalshi remains involved in several legal fights
The FlightAware case lasted only about a day, but Kalshi has been involved in a series of longer-running disputes over how its event contracts should be treated under U.S. law.
In July, a federal judge rejected Kalshi’s request for a preliminary injunction in its dispute with New York over sports event contracts, allowing the state’s case to move forward to the motion-to-dismiss stage. As previously covered by crypto.news, U.S. District Judge Analisa Torres found that Kalshi had not established at that stage that federal commodities law was likely to preempt New York’s gambling rules.
State authorities and Kalshi have repeatedly disagreed over whether sports-linked event contracts should fall under state gambling laws or the federal derivatives framework administered by the Commodity Futures Trading Commission.
A separate case in Michigan produced another setback for the company in June. An Ingham County Circuit Court judge temporarily barred Kalshi from offering sports event contracts to Michigan residents for 14 days and required the company to comply with geolocation restrictions. The order carried potential fines of $120,000 for each day of noncompliance.
Kalshi has taken the opposite position in several federal lawsuits, arguing that its status as a CFTC-regulated designated contract market places its event contracts under federal jurisdiction.
Federal and state authorities remain divided over Kalshi
The regulatory dispute has also drawn the CFTC directly into court battles involving prediction markets.
In June, Kentucky Attorney General Russell Coleman sued Kalshi, Polymarket and related companies, alleging that the platforms were offering unlicensed sports betting. The Kalshi complaint also named Coinbase, Robinhood and Webull over their role in providing access to sports event contracts.
Days later, the CFTC sued Kentucky in federal court and sought to stop the state from applying its gaming laws to federally regulated prediction market operators. The agency argued that event contracts traded on regulated exchanges fall within federal commodities law and its jurisdiction.
Similar questions reached the courts earlier this year. In April, the U.S. Court of Appeals for the Third Circuit sided with Kalshi in its dispute with New Jersey, finding that the state could not regulate the company’s CFTC-supervised sports contracts under its gambling rules. The 2-1 ruling held that the Commodity Exchange Act gave federal authorities jurisdiction over the contracts.
Kalshi has continued bringing its own challenges against state restrictions. In May, the company sued Minnesota officials over a law scheduled to take effect Aug. 1 that would make operating a prediction market in the state a felony. Kalshi argued in the complaint that the Commodity Exchange Act gives the CFTC exclusive authority over its event contracts.
Prediction market activity has continued despite court disputes
Kalshi’s legal challenges have developed while trading activity on prediction markets has remained substantial.
In June, Defirate data cited in an earlier report showed Kalshi recording $3.7 billion in weekly trading volume, compared with $3.2 billion on Polymarket. Sports-related contracts accounted for the largest category on both platforms, with Kalshi processing about $328 million in daily sports trading volume at the time.
The company has also expanded outside conventional event contracts. In June, Kalshi added perpetual futures tied to Zcash, Near Protocol and other digital assets, taking its CFTC-regulated crypto perpetual lineup to 13 assets at the time.
FlightAware’s dispute concerned a different part of Kalshi’s product offering: contracts determined using flight cancellation information. Following the dismissal, Kalshi’s market page no longer names FlightAware in its verification statement and instead identifies a “Primary Source Agency,” while its disclaimer says references to the agency’s cancellation and delay information do not indicate endorsement or affiliation.
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