Kalshi and Polymarket M&A Targets Amid Consolidation

Bernstein reports that Kalshi and Polymarket may soon be targeted for mergers and acquisitions as prediction markets continue to consolidate.

FinanceKalshi and Polymarket may be prime M&A targets amid market consolidation, says Bernstein

According to Bernstein, the merging of operational frameworks is causing a blurring of distinctions between exchanges, brokerages, and sportsbooks, paving the way for acquisitions within the prediction market sector.

By Will Canny, AI Boost|Edited by Stephen Alpher Jun 29, 2026, 12:56 p.m. 3 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedIn Facebook Email Make preferred on

Kalshi, Polymarket may be prime M&A targets as prediction markets consolidate: Bernstein. (Unsplash)SummaryShow

Bernstein indicated that vertically integrated prediction market platforms are laying the groundwork for a surge in M&A activity across sportsbooks, exchanges, and consumer finance companies.
The brokerage mentioned that businesses that possess both distribution to consumers and exchange infrastructure are capturing a larger share of the economics internally, intensifying strategic competition among rivals.
Kalshi and Polymarket could potentially become acquisition targets, while even large sportsbook mergers now seem more strategically viable.

According to Bernstein, the swift integration of the prediction market technology framework is increasing the likelihood of a fresh wave of mergers and acquisitions within the sports betting and financial sectors.

In the last eight months, every significant consumer-oriented prediction platform has opted to control both customer distribution and exchange infrastructure, as indicated in the report.

Analysts led by Ian Moore stated, "Kalshi and Polymarket have control over the technology stack but are lagging in distribution, making both viable candidates for acquisition as well as potential acquirers."

The report highlighted recent activities, including DraftKings' purchase of Railbird to establish its DKeX exchange, Robinhood's collaboration with Susquehanna to create Rothera, Coinbase's acquisition of The Clearing Company shortly after launching event contracts, and Flutter's establishment of a dual-FCM framework to ensure access to various exchanges.

This trend aligns with Bernstein's perspective that prediction markets are merging with sports betting and consumer finance into a unified competitive arena, allowing for combinations that once appeared improbable, such as sportsbooks acquiring exchanges, exchanges buying sportsbooks, and consolidation among sportsbook operators.

In the last two years, prediction markets have gained significant traction in the financial mainstream, driven by the popularity of election betting, the growth of sports event contracts, and increasing acceptance by major retail trading platforms. Firms like Robinhood, Coinbase, and DraftKings have either launched or expanded their offerings in prediction markets, leading to a notable rise in trading volumes on industry leaders Kalshi and Polymarket, thus attracting greater investor attention and regulatory scrutiny.

However, despite this rapid expansion, prediction markets continue to grapple with considerable regulatory and legal uncertainties. State gaming regulators have contended that sports event contracts constitute unlicensed sports betting, while the Commodity Futures Trading Commission (CFTC) has claimed exclusive federal authority over these products, resulting in an escalating legal conflict that might eventually be resolved in court.

The CFTC is also in the process of developing formal regulations for event contracts as lawmakers and consumer advocates express concerns regarding market integrity, consumer protection, and potential market manipulation.

The report noted that the financial dynamics are already changing. Companies that operate their exchanges are retaining revenue that previously went to third-party platforms. For instance, Robinhood directed its highest-volume World Cup contracts through Rothera instead of Kalshi, and DraftKings transitioned prediction market trading from the Chicago Mercantile Exchange (CME) and Crypto.com infrastructure to DKeX in late June.

Coinbase has achieved around $100 million in annualized revenue from prediction markets, Robinhood has processed over 16 billion event contracts this year, and DraftKings reported annualized consumer prediction volume nearing $3.4 billion.

Currently, Robinhood and Coinbase hold the most competitive advantages, combining large consumer bases with fully owned regulated infrastructures, as indicated by the analysts. DraftKings has narrowed the gap with Railbird, while Kalshi and Polymarket remain logical candidates for acquisition due to their ownership of exchange technology but lack comparable consumer distribution.

Potential consolidation among sportsbooks, including an unlikely merger of Flutter and DraftKings, could provide strategic advantages by decreasing promotional expenses, enhancing customer acquisition efficiency, and fostering operational synergies across prediction market infrastructure, market making, and user experiences, the report concluded.

Prediction Markets mergers and acquisitions Kalshi Polymarket BernsteinAI 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.Latest Crypto News

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