Wall Street broker Bernstein said prediction market platforms are poised for a wave of mergers and acquisitions as companies integrate customer distribution with exchange infrastructure.
In a report released Monday, analysts led by Ian Moore said the trend is blurring lines between exchanges, brokerages and sportsbooks. They highlighted that Kalshi and Polymarket own their technology stacks but trail on distribution, leaving each as a plausible target or acquirer.
The broker pointed to recent moves by rivals. DraftKings acquired Railbird to launch DKeX, Robinhood partnered with Susquehanna to build Rothera, and Coinbase acquired The Clearing Company. Flutter established a dual-FCM structure.
Robinhood and Coinbase hold the strongest positions with large audiences and owned infrastructure, Bernstein said. Kalshi and Polymarket remain logical acquisition candidates. The report also noted rising volumes, including Coinbase's roughly $100 million in annualized revenue and DraftKings' $3.4 billion in consumer prediction volume.
Prediction markets face ongoing regulatory uncertainty, with state gaming regulators and the CFTC asserting competing jurisdiction over event contracts.
