FlightAware has voluntarily dismissed a lawsuit against Kalshi, with the two companies seemingly reaching an out-of-court agreement.
FlightAware sued Kalshi in New York on Monday, claiming the prediction market operator had agreed not to use its data for commercial purposes.
“Kalshi is using FlightAware’s data and name to run gambling markets on flight cancellations. 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,” stated the complaint.
Kalshi Removes FlightAware References
Seemingly in response to the lawsuit, Kalshi removed the mention of FlightAware under its markets, which let users trade on flight cancellations.
Previously, the platform prominently listed FlightAware as the source to verify whether over 50% of flights at JFK would be canceled on October 21.
The market has now replaced FlightAware with “Primary Source Agency,” and added the disclaimer, “This market and these products have not been endorsed by the Primary Source Agency or its affiliates. Any references to the Primary Source Agency’s delay and cancellation page, or any associated marks, are descriptive only and do not indicate an endorsement of this product or any affiliation between the Primary Source Agency or its affiliates and Kalshi.”
The Primary Source Agency link continues to direct to FlightAware.
FlightAware Withdraws Lawsuit
The addition of the disclaimer appears to be enough to satisfy FlightAware, and the company withdrew its lawsuit on Tuesday.
When contacted, neither FlightAware nor Kalshi responded for comment.
Kalshi Sold Flight Markets Despite Opposition
Last month, Kalshi self-certified flight cancellation markets with the CFTC. However, FlightAware objected to the use of its data to settle the markets. There were also accusations that bad actors could intentionally cause flight delays to profit from the outcomes.
In response, Kalshi said it would not move forward with the plans.
Later in July, it created the JFK market at the request of NextPredict, which describes itself as “the world’s first global B2B prediction markets conference”.
With a conference scheduled for October 22-23 in New York, NextPredict announced that it had secured $3 million in coverage from Susquehanna, a leading market maker on Kalshi.
In a press release, the company said it would “pay $12,000 in premium for contracts that could return the cost of the summit if more than 50 percent of flights scheduled to arrive at New York’s John F. Kennedy International Airport are canceled on Oct. 21”.
Publicity Stunt Appears to Backfire
The market appears to be a publicity stunt to show that companies can use Kalshi to hedge against the risks of event cancellations.
“Using prediction markets to help hedge that risk could be a godsend for event organizers because we no longer have to accept exposure as an unavoidable part of the business,” said Pierre Lindh, co-founder and managing director of NEXTPredict.
This use of Kalshi appears similar to a La Liga club allegedly using the platform to insure against relegation from Spain’s top soccer league. The club, which was identified as Osasuna, denied that it had authorized trading on Kalshi, but admitted it had taken out an insurance policy, which it said is standard practice against the financial threat of relegation.
Market Available for Trading Despite Kalshi’s Assertions
Kalshi said the flight market would only be available to the company’s group of around 1,000 institutional users. It also said that a series of excluded events, including bomb threats, cyberattacks, and laser incidents, would result in the market refunding bets. This, it claimed, protected the market against bad actors deliberately canceling flights.
However, CasinoBeats found that normal users could still trade on the market. We tested the waters with a $1 wager, which processed normally, suggesting there is no limitation on who can trade.
In addition to the $3 million that NextPredict said it had secured from Susquehanna, an additional $41,707 has been traded on the market. The market currently puts a 2.8% chance on at least 50% of flights being canceled.
The majority of the legal battles Kalshi is facing focus on its sports markets. Connecticut joined eight other states in ruling this week that these should be subject to state gambling laws. Kalshi continues to insist the markets are valid under federal law.
The JFK market remains the only flight cancellation market on Kalshi. The company did not respond when asked if it plans to offer similar markets again in the future.
The post FlightAware Cancels Lawsuit Against Kalshi, But Remains Source on Flight Market Open for Trading appeared first on CasinoBeats.
FlightAware has voluntarily dismissed a lawsuit against Kalshi, with the two companies seemingly reaching an out-of-court agreement. FlightAware sued Kalshi in New York on Monday, claiming the prediction market operator had agreed not to use its data for commercial purposes. “Kalshi is using FlightAware’s data and name to run gambling markets on flight cancellations. Despite
The post FlightAware Cancels Lawsuit Against Kalshi, But Remains Source on Flight Market Open for Trading appeared first on CasinoBeats.