“Kalshi is using FlightAware’s data and name to run gambling markets on flight cancellations” is the opening sentence in the flight-tracking platform’s lawsuit against the largest US prediction market.
FlightAware sued Kalshi in the Southern District of New York on Monday, accusing the prediction market of breach of contract and trademark infringement, among other things. It is asking a federal judge to block Kalshi from using its name and data, in addition to damages.
From the complaint:
Despite entering into a binding agreement not to use FlightAware’s data for commercial purposes, including in connection with gambling or prediction markets, Kalshi has built flight-cancellation betting pages verified by FlightAware’s data, displayed FlightAware’s registered trademark on the betting pages and connected to the settlement of its betting contracts, and continued after FlightAware demanded that it stop.
Kalshi still has markets up as of early Tuesday morning, although the markets do include a disclaimer saying the market has not been endorsed by FlightAware.
Here’s a timeline of events as alleged by FlightAware in the complaint:
July 14: “…a Kalshi employee…created a free User Account using a Kalshi email address…”
“Kalshi filed a self-certification with the U.S. Commodity Futures
Trading Commission (“CFTC”) that enabled it to solicit bets on the percentage of scheduled flights that would be cancelled out of an individual airport in a particular time period, identifying FlightAware as the “Primary Source Agency” used to settle the outcome of those bets. In doing so, Kalshi associated FlightAware and its data with Kalshi’s gambling markets without FlightAware’s knowledge or consent.”
“Within hours, national media outlets reported that Kalshi intended to offer those markets and contacted FlightAware for comment. Until it was contacted by media outlets for comment, FlightAware had no knowledge of Kalshi’s CFTC self-certifications or its plans to offer flight-cancellation markets.”
July 15: “…upon learning of Kalshi’s unauthorized use of FlightAware’s data, FlightAware cancelled Kalshi’s Personal AeroAPI account and sent Kalshi a cease-and-desist letter advising that Kalshi’s use of FlightAware’s data violated Kalshi’s legal obligations and demanding it cease misusing FlightAware’s data and mark.”
July 17: “Although Kalshi represented to the media that it would stop offering these bets, on July 17, 2026, Kalshi denied, by response to FlightAware’s cease-and-desist letter, that it had violated FlightAware’s license or infringed the FlightAware mark and asserted that its references to FlightAware constituted nominative fair use.”
After July 17: “FlightAware and Kalshi continued to correspond, with FlightAware emphasizing Kalshi’s ongoing violation of the Terms of Use and Kalshi baselessly denying any such misuse. Only after receiving FlightAware’s cease-and-desist letter did Kalshi add a disclaimer to its market pages. The disclaimer states that the markets and products ‘have not been endorsed by FlightAware LLC or its affiliates’ and that references to FlightAware ‘are descriptive only and do not indicate an endorsement of this product or any affiliation between FlightAware LLC or its affiliates and Kalshi.’”
FlightAware says that Kalshi’s use of its name in the markets has created harm:
“There was considerable national news coverage of Kalshi’s betting markets in reliance on FlightAware’s data. News of Kalshi’s proposed market for bets on airline cancellations has been met with wide public outcry, with numerous online commenters noting the safety risks posed by incentivizing speculators and bad actors to cause cancellations to profit from bets they place. …
FlightAware is suffering irreparable harm to its reputation as commenters mistakenly assume that FlightAware is sponsoring or otherwise collaborating with Kalshi in establishing these markets. As a company whose business depends on the safety and integrity of aviation, FlightAware is facing imminent and irreparable harm by having its data and name associated with conduct that could compromise flight operations and passenger safety.”
FlightAware also questions why Kalshi needs to use FlightAware at all:
Kalshi does not need to use FlightAware’s marks or data to offer or resolve its flight-cancellation markets. In its self-certification filing with the U.S. Commodity Futures Trading Commission, Kalshi 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, as shown in the below excerpt. Kalshi can therefore operate these markets without using FlightAware’s marks or data.
You can see the complaint here:
A quick look at what matters most in prediction markets.
Judge Rejects Every Major Kalshi Argument In Comprehensive Ruling Against Sports Contracts (InGame): A federal court has ruled that Connecticut can enforce its sports betting laws against Kalshi, rejecting the prediction market’s arguments on almost every possible question in one of the most comprehensive rulings against the prediction market to date. …
“The two main questions in the case, like other state-vs.-prediction market lawsuits, are whether the Commodity Exchange Act (CEA) preempts state gambling laws, and if it does, whether sports event contracts can be classed as ‘swaps’ in order to be covered by the preemption. .. Yet the judge, Vernon D. Oliver, ruled against Kalshi on both arguments, even while noting that he did not need to make a decision on both questions in order to issue an opinion.”
Related: Eight States Now Have Authority To Ban Or Restrict Kalshi (InGame): “Utah last week joined seven other states that have had at least some success in keeping Kalshi from operating within their borders. Last Tuesday, a U.S. district court judge ruled that the state could enforce its gambling laws to prohibit the platform, though for now it is still available in the state. According to the Associated Press, Attorney General Derek Brown does plan to enforce the laws but has not yet determined the pathway to do so.”
🔍 It continues to be a rough go for Kalshi and the prediction markets industry in the courts. While that might be important signal, the rulings from circuit courts — and ultimately the Supreme Court — will matter more.
The CFTC Innovation Advisory Committee meets next week
From a press release:
Chairman Michael S. Selig, sponsor of the Innovation Advisory Committee, today announced the IAC will host its inaugural meeting at 1 p.m. EST on Aug. 20, in Washington.
The Innovation Advisory Committee was created to advise the Commission on complex issues at the intersection of technology, law, policy, and finance. This council of American innovators, entrepreneurs, thinkers, and builders will provide insights and recommendations to the Commission to help ensure its regulations keep pace with the rapid speed of innovation on the new frontier of finance.
This meeting will be livestreamed on CFTC.gov.
This is the committee that has Kalshi CEO Tarek Mansour, Polymarket CEO Shayne Coplan, and DraftKings CEO Jason Robins, among many others with ties to prediction markets. Whole list here.
Who will actually be there, and what will they talk about? Stay tuned!
Well, it sure as hell isn’t markets about flight cancellations.
The Texas Senate race between James Talarico (D) and Ken Paxton (R) is a coin flip as of early Tuesday morning:
New self-certifications listed with the Commodity Futures Trading Commission:
DraftKings filed to offer combos:
More coverage from InGame
And more filings from DraftKings:
Gemini posted a bunch of stuff (this is not all of the contracts):
Kalshi posted these:
“Meanwhile, reviews of Kalshi’s application in Apple’s App Store reflect that many consumers understand Kalshi to be a betting platform. For example, one review, titled ‘More fun than a free hooker in Vegas,’ states: “‘This is so much fun and you can bet on literally anything. So far I’ve been winning 8 out of 10 times.’”
— From a footnote in FlightAware’s complaint in federal court against Kalshi.
Kalshi volume: $1.07 billion
Sports + parlays: 79.2% of volume
Crypto markets: 19.6% of volume
Trend line from Ticker Tracker:
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Everything else important that happened in or was written about prediction markets:
Kalshi Adopts Nasdaq Market Surveillance to Enhance Market Oversight (press release): Kalshi, the next-generation financial exchange, today announced a multi-year partnership with Nasdaq Market Surveillance to enhance monitoring and oversight of trading activity on its markets. The agreement forms one component of Kalshi’s broader approach to market oversight, complementing the exchange’s existing surveillance framework.
Kalshi plans to implement Nasdaq Market Surveillance in a phased approach, providing access to advanced cross-market, cross-asset monitoring capabilities for both prediction markets and perpetual-style derivatives.
The institutional-grade platform is designed to support real-time detection of market abuse, manipulation, insider trading, and related misconduct. It will be integrated into Kalshi’s trading infrastructure, with the ability to scale alongside the exchange as the asset class expands and new products and markets come online. The platform will also support the delivery of Kalshi’s trade data to the Commodity Futures Trading Commission (CFTC), in the format the agency requires, in line with Kalshi’s obligations as a CFTC-regulated exchange.
“This deal reinforces Kalshi’s commitment to market integrity,” said Max Crowley, VP of Business Development at Kalshi. “Implementing Nasdaq Market Surveillance gives our markets the same surveillance data used by the world’s largest exchanges, and it’s built to scale with us as we grow.”
“Prediction markets are among the fastest-growing segments of the financial landscape, and they demand surveillance infrastructure with the scale and expertise that can match that pace,” said Tony Sio, Head of Regulatory Strategy and Innovation at Nasdaq.
🔍 Say what you will about Kalshi, but it does continue to invest in market integrity. Maybe the only quibble is why they didn’t do this deal sooner.
‘Really difficult path’ to legislation on prediction markets, Johnson says (SDPB): U.S. Rep. Dusty Johnson … “As chairman of the subcommittee that oversees commodity markets, I mean it’s my job to try to find out whether or not there is path for a legislation that would answer some of these open questions. I think it’s a really difficult path…”
Novig Sues Four States In First Week Offering Prediction Markets (Sports Betting Dime): “One day after launching its new prediction market offerings, Novig filed a lawsuit in federal court to potentially prohibit New York from enforcing its gambling laws against its markets. Since then, Novig has filed three other lawsuits in Massachusetts, New Mexico, and Washington.”
CFTC Eyes Prediction-Market Conflicts of Interest: Key Points (Sportico): “At least six prediction market exchanges have conflicts of interest baked into their corporate structures via “affiliate relationships,” according to the Commodity Futures Trading Commission (CFTC), the nation’s federal betting regulator. The CFTC proposed rules last week meant to address a trend of companies owning both a prediction market exchange and a principal trading desk that bets against customers on that exchange. The CFTC views these arrangements as inherently troublesome.”
From the Federal Register: The Commission has more recently observed a growing number of registered entities, including DCMs, that have affiliated market makers trading on the exchange. There are approximately eight DCMs with affiliated market makers. The Commission understands that this market structure is particularly prominent in prediction markets and that the operators of such markets believe that an affiliated market maker can be especially important in the creation and maintenance of new markets. The Commission notes that the exchanges with affiliated market makers have implemented a variety of measures to address potential concerns regarding these relationships.
At the same time, the Commission preliminarily believes that the existing framework of voluntary practices, however constructive, is uneven. As described above and below, various measures have been adopted to differing degrees and stringency, and they are memorialized in disparate forms. Because each measure is adopted at the discretion of the individual entity, it may be narrowed, modified, or discontinued, and such voluntary undertakings are not uniformly subject to the Commission’s examination and enforcement processes. Market participants who transact across multiple registered entities therefore cannot presently rely on a consistent baseline of protections, and the public may find it difficult to identify, compare, or verify the safeguards that apply to any particular affiliated relationship.
ProphetX and Pikkit Bring CFTC-Regulated Sports Prediction Markets to the Pikkit Community (press release): ProphetX, a CFTC-designated contract market (DCM) and derivatives clearing organization (DCO) built for sports prediction markets, and Pikkit, the leading tracking and social analytics platform used by hundreds of thousands of sports fans to sync, analyze, and compete across more than 30 platforms and daily fantasy sites, today announced a strategic partnership to bring federally regulated sports prediction markets to the Pikkit community.
Under the agreement, Pikkit will connect its users directly to ProphetX’s prediction market exchange. For Pikkit’s traders — who already benchmark their performance against friends, track every trade, and compare probabilities across platforms — this means a direct path to trade event contracts on real-world sports outcomes, from game results and player props to season-long futures. The event contracts will be available through the Pikkit platform and powered entirely by ProphetX’s CFTC-regulated infrastructure.
“Pikkit’s community is made up of the most engaged traders in the country — people who track every result and know exactly where their edge comes from. That’s exactly who prediction markets were built for. Partnering with Pikkit gives that community direct access to a federal exchange where the crowd sets the price and every participant competes on a level playing field, instead of against the house.” — Jake Benzaquen, Co-Founder and Chief Commercial Officer, ProphetX
ICYMI, I spoke with ProphetX:
Episode 27: Interview With ProphetX Co-Founder Jake Benzaquen
·
Aug 10
There are endless stories and hot takes about people betting on wildfires…even though no one is actually offering markets on fires. And there are lots of people yelling about betting on drug trials. What exactly is going on? Daniel O’Boyle of InGame breaks that down and all the recent news in prediction markets.
Kalshi partners with Blanket to help small businesses hedge against risk—with help from the guru of ‘hypergamblification’ (Fortune): “An independent financial economist has partnered with Kalshi on a new AI tool on top of the prediction-market exchange that aims to help small businesses hedge against everything from bad weather to election shocks—without hiring a Wall Street bank.”
How Genius Sports sees next evolution with prediction market deals (SBC Americas): “Genius Sports‘ new partnerships with Kalshi and Polymarket embody the company’s prediction markets strategy and prove that official data is vital for operators, said CEO Mark Locke on Thursday.”
“What we’ve established with Kalshi and Polymarket is a foundation upon which we will layer more content, more services, and more territories over time,” said Locke on the company’s Q2 earnings call. “It is the same compounding playbook that you have watched us execute in sports betting, now applied to prediction markets.”
FanDuel and DraftKings hedge their bets with a predictions pivot (Financial Times, paywall)
And on Substack:
On Substack: I am taking the over on this one.
And:
Prediction markets place odds on election results. Officials say they could erode public trust (VoteBeat): “I think it is something that we are going to have to wrestle with going into the November election and forward,” said Dean Logan, the registrar-recorder and county clerk for Los Angeles County, California, the country’s single most populous election jurisdiction, during a webinar organized by the Partnership for Large Election Jurisdictions this month.
Logan said in the Los Angeles mayoral primary in June, “early election returns differed from market expectations, and that resulted in suspicion and questioning of normal ballot processing and canvassing procedures in California.” The bottom line, he said, is that “elections administration right now is very much affected by perception and misinformation, and in our field we have to be prepared to respond to that.”
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