Kalshi faces a lawsuit in a New York federal court over claims the prediction markets platform is using flight data and a trademark without permission to run bets on airline cancellations.

FlightAware, which operates the world’s largest flight-tracking platform, filed the suit in the U.S. District Court of the Southern District of New York on Monday, seeking damages and an injunction against further use of its data and logo.

Kalshi started offering bets on nationwide and local flight cancellations on July 14, the same day it submitted its regulatory filing to the Commodity Futures Trading Commission (CFTC) to list such event contracts. The contracts allow users to bet on the percentage of scheduled flights that would be canceled during a specific period.

FlightAware alleges Kalshi had agreed to terms barring commercial use of its data, including through a fee AeroApi account that a Kalshi employee registered for in 2022.

Kalshi responded to FlightAware's cease-and-desist letter, denying “it violated FlightAware’s license or infringed the FlightAware mark and asserted that its references to FlightAware constituted nominative fair use.”

The flight-tracking platform said Kalshi later added a disclaimer on its website stating that the markets were not endorsed by FlightAware. However, FlightAware argues the disclaimer does not solve anything because Kalshi continued to claim its data would still determine winners and losers

FlightAware also said it believes betting on flight cancellations creates safety risks by giving participants a financial incentive to influence whether flights are delayed or canceled. Kalshi has identified U.S. Department of Transportation flight data as an alternative source for settling the contracts, according to the complaint.

New York sued Kalshi at the end of last month, alleging it offers sports and event wagers in the state without a gaming license. The betting platform and other firms offering prediction market trades face similar lawsuits in at least two other states, Wisconsin and Nevada. FlightAware’s case is different as it tests whether a prediction market may use a third party’s data and trademark to settle contracts without a commercial agreement.

Kalshi did not respond immediately to a request for comment.