FlightAware, a flight tracking platform, has filed a lawsuit against Kalshi, an event contract trading exchange. In the lawsuit, FlightAware accuses the platform of using its trademark and data for prediction markets, causing reputational damage and potentially leading to negative consequences.
In the suit, FlightAware stated that Kalshi effectively violated its Terms of Use, which explicitly prohibit using information on the FlightAware website for commercial purposes.
The platform launched markets where users could bet on flight cancellations. Descriptions of these markets stated that outcomes were determined based on FlightAware data.
According to the company, Kalshi portrayed it as a "close partner" by displaying its trademark and brand mentions, thereby putting its reputation at risk. A corresponding disclaimer appeared only after FlightAware raised the issue.
Furthermore, the company believes that such betting markets could incentivize malicious actions and security breaches for profit. Although Kalshi claims it does not pay out in such cases, FlightAware considers the risk significant.
"Widespread outrage and concern have arisen that these markets will encourage unsafe practices to influence flight cancellations, threatening public safety and creating the potential for large-scale disruptions in air travel," said FlightAware.
The lawsuit also mentions that the organization has been repeatedly suspected of involvement in the betting activities.
In light of this, FlightAware is seeking a court injunction against Kalshi and monetary compensation of an unspecified amount.
At the time of writing, the Kalshi team has not commented on the situation.
This is just one example of the high legal pressure Kalshi has faced in the United States. For instance, music streaming service Spotify filed a complaint against the platform, accusing it of manipulating charts. Despite this, trading volumes continue to grow.
