The FlightAware Kalshi lawsuit lasted less than two days. FlightAware filed its complaint on Monday alleging trademark infringement and unauthorised use of its flight data, and by Tuesday had filed a voluntary notice of dismissal in the US District Court for the Southern District of New York.
The dismissal was filed without prejudice against all defendants, meaning FlightAware retains the right to refile. Neither company had publicly commented on the case as of Wednesday, leaving the question of whether any settlement was reached unanswered.
What FlightAware Was Seeking
According to Bloomberg Law, Kalshi denied violating FlightAware’s licence and argued its references to FlightAware constituted nominative fair use. The flight data company had sought unspecified damages plus court orders barring Kalshi from using its data and name entirely.
The original complaint, docketed as case 1:26-cv-06824, alleged trademark infringement, breach of contract, injury to reputation, and unfair competition. The US Patent and Trademark Office was notified of the case opening on 11 August 2026 and of its termination on 12 August 2026.
Before the dismissal, a judge had already ordered Kalshi to show cause why the court should not issue a temporary restraining order. That order never materialised. At least one of Kalshi’s flight-cancellation event contracts was subsequently amended, replacing “FlightAware” with “Primary Source Agency” as the entity responsible for verifying outcome data, with language clarifying the reference did not indicate endorsement or affiliation. The “Primary Source Agency” link pointed to FlightAware’s website.
The underlying market attracted minimal commercial interest regardless. CoinDesk reports that Kalshi’s flight-cancellation contract drew extremely low volume. The contract covering US flight cancellations for the week ending 14 August remained listed on Kalshi’s platform after the dismissal, though it no longer named FlightAware as its data source.
The FlightAware Kalshi Lawsuit Was the Least of Kalshi’s Legal Problems
The 48-hour resolution of the FlightAware dispute is a footnote compared to Kalshi’s broader regulatory exposure. New York filed suit against the company on 31 July 2026, alleging Kalshi operates an unlicensed gambling platform that exposes New Yorkers, including those under the legal gambling age of 21, to serious financial and personal risk.
The New York Attorney General’s office found that Kalshi had failed to obtain a licence from the New York State Gaming Commission and had sidestepped tax obligations applicable to licensed casinos and mobile sports betting platforms. The state is seeking more than $36 billion in damages, treble Kalshi’s alleged gains, and $100,000 per sports wagering offer, as well as permanent injunctions barring Kalshi from accepting wagers from under-21s and from advertising in college and university-owned media.
New York also filed a motion on 31 July seeking a temporary restraining order to halt Kalshi’s nationwide operations. On 1 August, KalshiEX LLC notified the Commodity Futures Trading Commission (CFTC) of a market emergency, arguing the restraining order would impair its ability to comply with Core Principles 2, 4, 6, 7, 9, 11, 12, and 21 of the Commodity Exchange Act. The CFTC invoked emergency authority on 11 August to block New York state officials from obtaining that order.
The federal-versus-state collision is not isolated to New York. In Michigan, the Circuit Court for the 30th Judicial Circuit issued a temporary restraining order on 29 June 2026 in Nessel v. KalshiEX LLC (No. 26-1087-CZ), prohibiting Kalshi from offering, listing, matching, executing, clearing, settling, or otherwise facilitating any contract constituting internet sports betting accessible to Michigan residents. The CFTC under chair Michael Selig ordered Kalshi not to comply with that state order, placing the company’s legal counsel in what they described as an “impossible position” between conflicting federal and state commands.
The CFTC has now filed lawsuits against nine states over their enforcement actions against federally regulated designated contract markets: Arizona, Connecticut, Illinois, Kentucky, Minnesota, New Mexico, New York, Rhode Island, and Wisconsin. The Commission has also filed amicus briefs in the US Court of Appeals for the Sixth and Ninth Circuits and the Supreme Judicial Court of Massachusetts.
A New Jersey federal court has already granted Kalshi a preliminary injunction, concluding that the Commodity Exchange Act likely pre-empts state enforcement against its sports event contracts, according to Epstein Becker Green’s litigation review. The New Jersey Division of Gaming Enforcement has appealed that decision to the Third Circuit.
The Third Circuit’s ruling and the outcome of the CFTC’s nine-state suits will settle, or at least clarify, whether federal designated contract market status effectively immunises prediction market operators from state gaming law. Until that question is resolved, every state enforcement action against Kalshi will produce exactly this dynamic: a federal agency blocking a state court, and a platform caught in between.
