FlightAware Drops Kalshi Suit One Day After Filing Amid CFTC Clash

Woofun AI reports that FlightAware voluntarily dismissed its legal action against prediction market platform Kalshi in the US District Court for the Southern District of New York, just one day after initiating the case.

The timeline of the dispute began when FlightAware filed a lawsuit a day earlier, alleging that Kalshi had used its 'data and name to run gambling markets on flight cancellations.' By Tuesday, attorneys for FlightAware submitted the notice of voluntary dismissal, while Wednesday brought no public comment from either party regarding the sudden reversal.

Court proceedings had intensified when a judge ordered Kalshi to show cause why a temporary restraining order should not be issued over FlightAware's trademark and data. In response, Kalshi adjusted its operational language, changing references from 'FlightAware' to 'Primary Source Agency' as the entity verifying flight cancellation outcomes. This change included a disclaimer stating the trade did not 'indicate an endorsement of this product or any affiliation' between the two firms, with Primary Source Agency linked to FlightAware's website, .

The original suit alleged trademark infringement, breach of contract, injury to its reputation, and unfair competition. This legal action reflects a broader pattern where prediction market companies like Kalshi and Polymarket face scrutiny from US state gaming authorities and regulators over alleged illicit sports betting offered to residents.

A more critical variable is the federal versus state jurisdiction conflict involving the US Commodity Futures Trading Commission (CFTC). Chair Michael Selig has repeatedly asserted the agency holds 'exclusive jurisdiction' over prediction markets, invoking 'emergency authority' to block New York state officials from seeking a temporary restraining order. This intervention followed New York authorities filing a lawsuit against Kalshi in July, alleging the company operated an unlicensed gambling platform.

The CFTC's stance mirrors its handling of a Michigan case in June, where a Michigan judge ordered Kalshi to halt sports betting contracts for residents. The company's head of enforcement and legal counsel said the CFTC order put it in an 'impossible position' between US state and federal orders.