FlightAware Drops Kalshi Lawsuit After 24 Hours, Signaling Possible Settlement
A prediction market lawsuit that lasted barely a day suggests out-of-court resolution as prediction market operators face intensifying regulatory pressure from multiple US agencies.
Lawsuit Withdrawn After 24 Hours
FlightAware, a prominent real-time flight tracking service, initiated legal action against Kalshi, a prediction market platform, accusing the company of misappropriating its proprietary flight data and brand identity to operate prediction markets centered on flight cancellations. The lawsuit alleged trademark infringement, breach of contract, injury to reputation, and unfair competition. In a striking reversal, FlightAware’s legal team voluntarily dismissed the entire case just one day after filing it in the US District Court for the Southern District of New York.
The extraordinary pace of the withdrawal strongly implies the parties reached a settlement, though neither company has publicly disclosed any agreement terms. Before the dismissal, a judge had ordered Kalshi to show cause why a temporary restraining order should not issue, but FlightAware’s action eliminated the need for that hearing.
Contract Changes and Regulatory Battles
Kalshi responded to the litigation by modifying its event contracts. Flight-related prediction contracts that had previously identified FlightAware as the official data verification source were updated to list “Primary Source Agency” as the verification entity instead. The updated language included explicit disclaimers stating the contracts did not represent an endorsement or affiliation between the two companies, likely reflecting settlement terms.
This dispute occurs amid escalating regulatory warfare against prediction market platforms. According to the CFTC, as reported by Cointelegraph, the agency invoked emergency authority to block New York state officials from obtaining a restraining order against Kalshi. The action followed New York’s July lawsuit alleging Kalshi operated an unlicensed gambling platform offering event prediction contracts to residents. Michigan presented an even more acute regulatory conflict: a state court ordered Kalshi to cease offering sports prediction contracts, yet the CFTC instructed Kalshi to disregard the state order, asserting exclusive federal jurisdiction and leaving the platform caught between mutually exclusive regulatory commands.
Polymarket and other prediction market operators contend with similar legal challenges from state gambling authorities. The fundamental disagreement over whether these platforms constitute state-regulated gambling or federal-regulated financial instruments remains unresolved—a regulatory uncertainty that shapes how cryptocurrency and blockchain-based trading platforms navigate the American legal landscape.
Source: FlightAware, via Cointelegraph. Not financial advice.