FlightAware Sued Kalshi Over Flight Cancellation Betting Markets — Then Pulled The Case In 24 Hours

FlightAware sued betting market Kalshi over its flight cancellation prediction markets on Monday, which use FlightAware data to resolve the outcomes. And then they dismissed the case on Tuesday. I didn’t have that on my bingo card, but it suggests to me that they’ve quickly settled. This all happened before Kalshi even answered the complaint, and before a judge had ruled on FlightAware’s emergency injunction request. The flight cancellation market remains, but it no longer mentions FlightAware’s name, now saying instead “Primary Source Agency” with a link to FlightAware. According to the complaint, Kalshi opened a free Personal AeroAPI account with FlightAware in 2022 and affirmatively accepted its license terms. They created another free FlightAware account last month. FlightAware then terminated the API account and sent a cease-and-desist letter, and amended its terms to prohibit use for betting, gambling, prediction markets and event contracts. Kalshi argued that cancellation information was public and that naming FlightAware was fair use. It added a disclaimer saying FlightAware and Kalshi had no affiliation but continued identifying them. The strongest claim was that Kalshi agreed to API terms. Kalshi’s claim that market outcomes were “verfieid from FlightAware” might plausibly suggest FlightAware involvement, but it’s from FlightAware and not by FlightAware. FlightAware pointed to users who appeared to believe it was cooperating with Kalshi. Kalshi’s response that telling customers what source is resolving markets is fair use is probably correct. Obtaining settlement data through the Personal AeroAPI account would have to follow the rules of that account. The reason FlightAware seems to care is public outrage over this market and other prediction market controversies, alleged government insider trading, and the manipulation of a Paris airport weather station to game the outcome of a betting market. The real risk in these markets isn’t a single passenger betting and affecting outcomes, it’s an airline insider who controls dispatch, maintenance, or crew decisions harming operations for financial gain, or employees might be incentivized to cut corners on safety to maintain on-time operations if they have their own finances on the line. Seinfeld saw the potential for manipulating airline on-time performance betting markets 30 years ago when Kramer bet on whether arriving flights will beat their scheduled times. Jerry created an airport disturbance that delays a flight, and the wager was treated as tainted. On the other hand, an airport cancellation market could actually be a good hedge for travel insurers, event organizers, and airport hotels. A robust market could also provide a real-time estimate of the likelihood of severe disruption. Topics on this page