Prediction market platform Kalshi has scrapped plans to launch contracts allowing users to bet on flight cancellations, pulling back after social media backlash and a data access problem that would have undermined how those contracts were settled.

The company had planned to begin listing the contracts on Wednesday, according to a regulatory filing, but a spokesperson confirmed on Thursday that Kalshi has chosen not to proceed for now. The withdrawal came after FlightAware, the widely used airline-tracking service, told Kalshi it would not permit its data to be used to resolve the contracts – a significant practical obstacle, given that flight data would need to underpin any payout determination.

Social media reaction added further pressure. Critics raised concerns that such contracts could give bad actors a financial incentive to cause airport disruption, whether by coordinating cancellations or making false threats designed to ground flights. The worry, amplified quickly across platforms, was that someone standing to gain from a mass cancellation event might take steps to engineer one.

Kalshi had structured the contracts to cover airport-wide cancellations rather than individual flights, and had included explicit rules barring insiders – among them TSA agents, airport staff and union officials – from placing wagers. Whether those safeguards would have been sufficient to neutralise the manipulation risk remains an open question.

It is also worth noting that calling in fake threats to airports carries severe criminal penalties, which some observers argued made the public concern somewhat overstated. Nonetheless, the combination of the data setback and the reputational noise proved enough for Kalshi to step back. The company has not indicated whether it plans to revisit the product.

Kalshi has been among the more prominent platforms operating in the regulated prediction markets space, offering contracts across a range of real-world outcomes. The flight cancellation episode illustrates the sensitivity that can surround new contract types – particularly where critics can draw a plausible, if not necessarily likely, line between a financial incentive and harmful real-world behaviour.