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FinanceKalshi files with CFTC to launch flight cancellation prediction markets; FlightAware blocks data use
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Prediction market platform Kalshi has filed with the Commodity Futures Trading Commission to offer contracts tied to flight cancellations at US airports, allowing users to bet on cancellation percentages within fixed timeframes. The contracts would use FlightAware as the primary data source, with Transportation Department statistics as backup. However, FlightAware's parent company RTX stated that no company is authorized to use its data for this purpose and will terminate accounts violating terms of use. The filing comes during the US summer travel rush when disruptions are common. Kalshi has implemented guardrails against insider trading, including employment verification and blocking politicians and athletes from relevant markets. The prediction market industry faces criticism from lawmakers who view it as enabling insider trading, though Kalshi's CEO argues traditional stock markets face greater insider trading threats.
Source report
Getting stuck at the airport after a canceled flight could become a little less painful — if you can profit from it.
Kalshi is seeking to launch a new prediction market that could turn airport departure boards into a fresh trading arena. According to a Tuesday filing with the Commodity Futures Trading Commission (CFTC), the company has filed to offer contracts tied to flight cancellations.
How It Would Work
The contracts will let users bet on percentages of how many flights are canceled at specific airports, given a fixed timeframe, per Kalshi's filing.
The prediction markets platform lists FlightAware as its primary data source. The Transportation Department's statistics are listed as a secondary source, but only if FlightAware is "unavailable or does not publish a usable figure."
A Potential Roadblock
There's a bit of a snag, though — FlightAware says Kalshi won't be allowed to use its data.
"No company is — or will be — authorized to use the data collected through the FlightAware network for this purpose," a spokesperson for FlightAware's parent company, RTX, told Business Insider in a statement on Wednesday. "Any customer who uses FlightAware in violation of the terms of use will have their account terminated."
Context and Timing
Kalshi's filing comes amid the US summer travel rush, when Americans are set to pack crowded airports, all while contending with thunderstorms and operational disruptions that can snarl schedules.
These flight-related prediction markets could turn one of the most vexing parts of travel into a tradable bet. Prediction markets function on contracts, where people can bet on everything from pop culture events and the weather to major events like Federal Reserve decisions.
Industry Criticism and Safeguards
The industry has drawn strong criticism from lawmakers, who have said that companies like Kalshi and Polymarket enable insider trading, particularly in areas like sports and politics. Several lawmakers in multiple states have proposed bills that range from limits to outright bans on prediction markets.
In response, Kalshi has put guardrails in place to prevent insider trading:
- Users must submit employment verification before they can trade.
- The platform preemptively blocks politicians, athletes, and other relevant people from trading in certain political and sports markets, the company said in March.
CEO Tarek Mansour said in June that insider trading is a bigger threat to the traditional stock market than to prediction markets.
Source
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Kalshi seeks to launch flight cancellation prediction markets, but FlightAware blocks data use