FlightAware sues Kalshi over the data that settles flight contracts

What happened

FlightAware LLC sued Kalshi Inc., KalshiEX LLC, Kalshi Klear Inc. and Kalshi Klear LLC in the US District Court for the Southern District of New York on 10 August 2026, in case 1:26-cv-06824. The complaint opens by stating that 'Kalshi is using FlightAware's data and name to run gambling markets on flight cancellations' and that it did so 'despite entering into a binding agreement not to use FlightAware's data for commercial purposes, including in connection with gambling or prediction markets'. The sequence it sets out is dated. On 14 July 2026 Kalshi filed a self-certification with the Commodity Futures Trading Commission enabling contracts on the percentage of scheduled flights cancelled out of an individual airport, naming FlightAware as the 'Primary Source Agency' used to settle them; the market pages state that the 'Outcome verified from FlightAware' and that a flight counts as cancelled only if it is 'classified as cancelled by FlightAware as of the expiration time', with the registered mark shown in bold and hyperlinked to FlightAware's website. FlightAware says it 'learned of these markets and their reliance on FlightAware's data and trademarks only when reporters called for comment'. Kalshi had opened a free Personal AeroAPI account on 14 July 2022, whose licence permits personal use only; a Kalshi employee who the complaint says works on market specification and resolution opened a free user account on 14 July 2026. FlightAware cancelled the API account and sent a cease-and-desist letter on 15 July, amended its terms of use on 16 July to prohibit use 'in connection with any betting, wagering, gambling, prediction market, event contract, or similar platform or product', and says Kalshi replied on 17 July denying breach and asserting nominative fair use. Kalshi then added a disclaimer stating that its markets 'have not been endorsed by FlightAware LLC or its affiliates' and that references to the name are 'descriptive only'. The complaint says that 'as of August 10, 2026, Kalshi continues to solicit bets using FlightAware's data'. Six counts are pleaded: breach of contract, federal trademark infringement under 15 USC 1114, injury to business reputation under section 360-l of the New York General Business Law, unfair competition under 15 USC 1125(a)(1)(A), unjust enrichment in the alternative, and New York unfair competition. FlightAware demands a jury, a temporary restraining order and permanent injunctions, disgorgement of profits, punitive damages and up to treble damages under the Lanham Act. Ten further papers were docketed the same day, including a proposed order to show cause with emergency relief and two declarations. FlightAware's corporate disclosure statement names RTX Corporation and AIRINC, Inc. as its corporate parents.

Why it matters

An event contract is worth no more than the fact that settles it, and this complaint is about who owns that fact. Kalshi earns a fee on each trade and the complaint quotes its own description of the model, that it makes its money by taking 'a small fee on each transaction on our platform'. The resolution input for the flight markets was not bought. The sharpest paragraph is the eighty-fourth, and it argues against the plaintiff's own leverage: Kalshi's self-certification identified 'the U.S. Department of Transportation Bureau of Transportation Statistics On-Time Reporting data as an alternative source agency if FlightAware data is unavailable', so the venue can run the market without the vendor. That converts the dispute from whether these contracts can exist into what a settlement source is worth and who captures the value, which is the question every venue that settles against a private index or a proprietary feed will eventually be asked. FlightAware's stated objection is not price. It says its business rests on being independent of the events it reports, that it 'has no financial interest in whether any particular flight is timely, delayed, or cancelled', and that a market on cancellations rewards anyone able to affect either the event or the data recording it. The complaint catalogues the precedents it has in mind, including the Paris temperature reading at Charles de Gaulle that spiked after a long-shot wager on Polymarket in April 2026, a White House teleprompter operator betting on the words the President would say, and Spotify removing streams after suspicious trading on its daily chart. It arrives a day after the CFTC told these same venues that showing a derivative in bookmaker odds misleads the buyer. The regulator's claim was that the display is part of the product; the claim here is that the resolution is somebody else's property. Both bear on the same cost line, which is what a venue must buy before it can list a market at all. Naming Kalshi Klear LLC, the in-house clearing house, alongside the exchange also puts the settlement leg of the business inside the pleading rather than only the front end.

What is not settled

Nothing has been decided. The emergency papers were filed with the complaint and the docket records no ruling, no answer from Kalshi and no appearance for it. Its position is on the record only at second hand: through the complaint's account of the 17 July letter asserting nominative fair use, and through Fortune, which reported in July that a spokesperson called the claim unfounded because the information is in the public domain. The breach count turns on whether a personal-tier licence accepted through a sign-up screen binds the corporate defendant, and the complaint documents the screens rather than a negotiated contract. No licence fee is pleaded, so the damages theory has no stated measure. Whether the CFTC has any view is unaddressed: the self-certification route lets a designated contract market list a contract without prior approval, and nothing in the complaint suggests the Commission examined whether the named settlement source had agreed to the role. The Block reports that the markets were still live early on 11 August carrying the disclaimer. No outlet outside one crypto trade publication was found carrying the filing at all, on a case against a venue whose litigation the general press has followed closely all summer.