The rapid consolidation of the prediction market’s technology stack increases the chances of a new wave of mergers and acquisitions in sports betting and financial markets, according to Wall Street broker Bernstein.
Over the past eight months, all major consumer-facing prediction platforms have come into ownership of customer distribution and exchange infrastructure, the report said.
“Kalshi and Polymarket own the stack but lag in distribution, making each as plausible a target as an acquirer,” analysts led by Ian Moore said in Monday’s report.
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.
This trend reflects Bernstein’s view that prediction markets are converging with sports betting and consumer finance into a unique competitive landscape, opening the door to combinations that previously seemed unlikely, including sports betting buy-out exchanges, sports bet buy-out exchanges, and consolidation among sports betting operators themselves.
