This Wild New Travel Trend Could Turn Flight Delays Into Cash

Kalshi wants to let users bet on flight delays and cancellations through regulated prediction markets.Like a bit of a flutter now and then? If you’re an airline traveler (or just have an interest in airline on-time odds) you might soon be able to bet on whether or not your flights will be delayed. The prediction market platform Kalshi has filed with the Commodity Futures Trading Commission (CFTC) to allow users to hedge funds on airline on-time performance. If approved, the platform would allow traders to predict whether the flight-cancellation rate at a particular airport will be higher during a specific period. In order to settle predictions, Kalshi plans to use the flight-tracking platform FlightAware, with data from the Department of Transportation (DOT) as a backup. FlightAware seemed to push back on the plans on Wednesday. “No company is—or will be—authorized to use the data collected through the FlightAware network for this purpose,” a spokesperson said in a statement. “Any customer who uses FlightAware in violation of the terms of use will have their account terminated.”It’s worth noting that the Kalshi platform has filed with federal regulators for permission to hedge funds on airline performance, but states and other jurisdictions may have separate limitations. Sports betting, a similar type of gambling that is also supported by Kalshi, is legal in 39 states plus Washington, D.C. Thirty states allow online sports betting using Kalshi or similar platforms. States that continue to ban sports betting include Texas, California, Alaska, Hawai‘i, Alabama, Idaho, Minnesota, Oklahoma, South Carolina, and Utah. Continue Reading Article After Our Video Recommended Fodor’s Video Prediction markets have exploded during the World Cup. Kalshi posted $31 billion in notional trading volume in June. Sports contracts account for around 85% of that trading. Unlike sports books, where users bet against the house, which sets the odds and takes a fee, prediction markets allow users to bet directly against each other at a variable price based on real-time probability. The federal government views prediction market bets as financial derivatives, and they’re regulated by the CFTC. Prediction markets also allow trades based on geopolitical events, weather, and other outcomes that can sometimes be easily influenced. The U.S. House and Senate have both banned their members and staff from betting on prediction markets because of the sensitive information they have access to. Some states have also begun reviewing whether to place specific restrictions on prediction markets. Airline delays and cancellations, however, are less subject to manipulation. However, once prediction markets begin to include airline on-time performance among their trading options, airlines would need to spend resources to monitor workers who ultimately make decisions on whether or not to delay flights. Many airlines already have longstanding rules prohibiting gambling or betting while on duty, and gambling or betting, formally or informally, on operational outcomes. Some airlines and other companies have already been forced to review their own policies in response to the explosive growth of prediction markets. Many companies have had to make more explicit rules on using company data for personal gain—including the use of the data to inform trades on the markets, but so far progress has been slow. In April, the Justice Department indicted a U.S. Army soldier for using classified information about the timing of the capture of Nicolás Maduro in Venezuela to make wagers on Polymarket, a similar prediction market platform. The soldier involved reaped a profit of more than $400,000 from a successful trade on the platform. According to the Bureau of Transportation Statistics, 77.7% of major airline flights in the United States were considered on time, or had arrived within 15 minutes of their scheduled arrival time.