FlightAware Withdraws Kalshi Lawsuit as Flight-Betting Market Fails to Gain Traction

FlightAware has voluntarily dismissed its lawsuit against prediction-market platform Kalshi, pulling the case just one day after filing it in a New York federal court.

The flight-tracking company provided no explanation for the withdrawal and dismissed the case without prejudice. That means FlightAware can potentially revive the claims at a later date.

The decision comes as Kalshi’s flight-cancellation contracts have generated minimal trading activity, while the products have also faced criticism on social media.

Flight-Cancellation Contracts See Weak Demand

Kalshi reportedly suspended its flight-cancellation markets in July after social media users warned that traders could potentially manipulate outcomes by deliberately causing flight cancellations.

Market data also indicates limited interest from retail traders. A U.S. flight-cancellation contract running until Aug. 14 had recorded 31,412 contracts traded, with total volume of only about $1,842 and open interest of roughly 1,120 contracts.

That activity is negligible compared with Kalshi’s overall trading business, which has generated approximately $148 billion in volume this year, according to the platform’s data.

FlightAware’s dismissal filing did not reveal whether the two companies reached an agreement or whether Kalshi modified its contracts or the data used to settle them.

Neither FlightAware nor Kalshi immediately responded to requests for comment.

FlightAware Accused Kalshi of Using Data Without Permission

FlightAware’s lawsuit alleged that Kalshi used its flight data and trademark without authorization to offer prediction contracts based on airline cancellations.

The company sought damages and an injunction against markets that allowed users to wager on cancellation rates across the country and at individual airports.

Kalshi disputed the accusations, saying it had not violated FlightAware’s licensing rights or infringed its trademark. The company argued that its references to FlightAware constituted nominative fair use.

The complaint also said Kalshi had identified data from the U.S. Department of Transportation as an alternative source for determining the results of its contracts.

Lawsuit Ends Before Kalshi Files Its Defense

FlightAware dismissed the case before Kalshi filed an answer or sought summary judgment. That allowed the flight-tracking company to withdraw the action unilaterally under Federal Rule of Civil Procedure 41.

Kalshi launched its nationwide and local flight-cancellation contracts on July 14, the same day it filed with the Commodity Futures Trading Commission to list the event contracts.

The products allowed traders to take positions on the percentage of scheduled flights expected to be canceled over a specified period.

FlightAware’s dismissal also followed a CFTC development involving Kalshi. The regulator had announced the previous day that Kalshi was required to continue operating in New York amid a dispute with state authorities.

Legal Questions Around Prediction Markets Remain

Kalshi and other prediction-market operators are facing similar legal challenges in states such as Wisconsin and Nevada.

FlightAware’s case stood apart because it centered on intellectual property and data rights rather than simply the legality of prediction markets. It tested whether a platform could use a third party’s data and trademark to settle event contracts without a commercial licensing arrangement.

For now, the dispute has been closed. However, the dismissal without prejudice leaves FlightAware with the option to bring the claims again if it chooses to do so.