Kalshi has told the Commodity Futures Trading Commission it would support capping an exchange's affiliated trading desk at 5 percent of the exchange's quarterly betting volume, in a comment letter sent to the agency this week, offering the limit as a compromise as federal regulators weigh new conflict-of-interest rules, according to Bonus.com. The proposal forms part of the agency's public comment period on its conflict-of-interest rule proposal, according to SCCG Management.
The suggested 5 percent quarterly cap described in this week's letter would apply industry-wide to both single-event contracts and parlays executed through a request-for-quote system outside the central order book, according to Bonus.com's account of the filing. Kalshi also asked the agency to define affiliate relationships according to voting interest and ownership percentage, and called for independent financial surveillance of those relationships plus strict informational barriers, including separate physical offices for the trading entity and the exchange, according to SCCG Management.
Kalshi spokesperson Elisabeth Diana told Bonus.com this week that Kalshi Trading has accounted for about 1.5 percent of volume on the company's exchange in 2026. "We support affiliated market making only on a narrowly limited basis, under programs that are disclosed to the public and filed with the CFTC," Diana said, according to the same report.
The proposal lands in a split industry. Major derivatives exchange CME Group is demanding an outright ban on principal trading by exchange affiliates, while Fanatics is pushing for no restrictions, according to Bonus.com. Kalshi argued that limited, publicly disclosed affiliated market-making is necessary for liquidity, but also conceded that some of the agency's draft measures would be too burdensome and could be sidestepped, according to the same report.
The concession is the story. Kalshi agrees that the corporate setup, in which an exchange owns a principal trading arm that trades on its own platform, creates potential risks warranting regulatory action, a position it had not previously acknowledged, according to SCCG Management. The letter positions Kalshi as a reasonable middle between CME's ban demand and Fanatics' hands-off stance.
Analysis: the 5 percent cap is a ceiling that costs Kalshi nothing today, since its own desk sits at 1.5 percent, while preempting the much harsher outcome CME is pushing. That is the classic shape of a self-regulation play: disclose the desk, cap it above your current level, and keep the market-making function that supplies your order books with quotes. What to watch: whether the CFTC adopts the cap industry-wide in a way that binds Fanatics too, whether CME's outright-ban camp accepts a compromise, and how the independent-surveillance requirement survives the comment period. If the number sticks, it becomes the template for how exchange-owned trading desks operate on every prediction-market venue.