Kalshi and Polymarket could become M&A targets as prediction markets consolidate: Bernstein

Finance Kalshi and Polymarket could become M&A targets as prediction markets consolidate: Bernstein The broker said operational consolidation is blurring the lines between exchanges, brokerages and sportsbooks, creating conditions for acquisitions across the prediction market ecosystem. By Will Canny , AI Boost | Edited by Stephen Alpher Jun 29, 2026, 12:56 p.m. 3 min read Make preferred on Share Share this article Copy link X icon X (Twitter) LinkedIn Facebook Email Make preferred on Kalshi, Polymarket could become M&A targets as prediction markets consolidate: Bernstein. (Unsplash) Summary Show Bernstein said vertically integrated prediction market platforms are setting the stage for increased M&A across sportsbooks, exchanges and consumer finance firms. The broker said companies that own both consumer distribution and exchange infrastructure are capturing more economics in-house, increasing strategic pressure on rivals. Kalshi and Polymarket could emerge as acquisition targets, while even large-scale sportsbook combinations now appear more strategically plausible. The rapid consolidation of the prediction market technology stack is raising the odds of a new wave of mergers and acquisitions across sports betting and financial markets, according to Wall Street broker Bernstein. Over the past eight months, every major consumer-facing prediction platform has moved to own both customer distribution and exchange infrastructure, the report said. "Kalshi and Polymarket own the stack but trail on distribution, which leaves each as plausibly a target as an acquirer," analysts led by Ian Moore said in the Monday report. The analysts noted that DraftKings acquired Railbird to launch its DKeX exchange, Robinhood partnered with Susquehanna to build Rothera, Coinbase acquired The Clearing Company shortly after launching event contracts, and Flutter established a dual-FCM structure to preserve access to multiple exchanges. The trend reflects Bernstein's view that prediction markets are converging with sports betting and consumer finance into a single competitive landscape, opening the door to combinations that previously seemed unlikely, including sportsbooks buying exchanges, exchanges buying sportsbooks, and consolidation among sportsbook operators themselves. Prediction markets have surged into the financial mainstream over the past two years, fueled by the success of election betting, the expansion of sports event contracts and growing adoption by major retail trading platforms. Companies including Robinhood, Coinbase and DraftKings have launched or expanded prediction market offerings as trading volumes on industry leaders Kalshi and Polymarket have climbed sharply, drawing heightened investor interest and regulatory scrutiny. Despite the sector's rapid growth, prediction markets continue to face significant regulatory and legal uncertainty. State gaming regulators have argued that sports event contracts amount to unlicensed sports betting, while the Commodity Futures Trading Commission (CFTC) has asserted exclusive federal jurisdiction over the products, setting up a growing legal battle that could ultimately be decided by the courts. The CFTC is also developing a formal rulemaking process for event contracts as lawmakers and consumer advocates raise concerns over market integrity, consumer protection and potential manipulation. The economics are already shifting, the report noted. Companies that own their exchanges are retaining revenue that previously flowed to third-party platforms. Robinhood routed its highest-volume World Cup contracts through Rothera rather than Kalshi, while DraftKings shifted prediction market trading from Chicago Mercantile Exchange (CME) and Crypto.com infrastructure onto DKeX in late June. Coinbase has reached roughly $100 million in annualized prediction market revenue, Robinhood has traded more than 16 billion event contracts this year, and DraftKings disclosed annualized consumer prediction volume approaching $3.4 billion. Robinhood and Coinbase currently have the strongest competitive positions, pairing large consumer audiences with fully owned regulated infrastructure, the analysts said. DraftKings has narrowed the gap through Railbird, while Kalshi and Polymarket remain logical acquisition candidates because they own exchange technology but lack comparable consumer distribution. Consolidation among sportsbooks, even a highly unlikely combination of Flutter and DraftKings, would offer strategic benefits by reducing promotional spending, improving customer acquisition efficiency and creating operational synergies across prediction market infrastructure, market making and user experience, the report added. Read more: SBI's $289 million Bitbank deal is symptomatic of Japan's crypto consolidation: Architect Partners Prediction Markets mergers and acquisitions Kalshi Polymarket Bernstein AI Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards . For more information, see CoinDesk's full AI Policy . 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