The rapid consolidation of the prediction market’s technology stacks is raising the odds for a new wave of mergers and acquisitions across sports betting and financial markets, according to Wall Street brokerage Bernstein.
Over the past eight months, all major consumer-facing prediction platforms have moved to own both customer distribution and exchange infrastructure, the report said.
“Kalshi and Polymarket own the stack but trail by distribution, leaving each an equally plausible target as an acquirer,” analysts led by Ian Moore said in Monday’s report.
The analysts noted that DraftKings bought Railbird to launch its DKeX exchange, Robinhood partnered with Susquehanna to build Rothera, Coinbase bought The Clearing Company shortly after launching event contracts, and Flutter established a dual-FCM structure to maintain access to multiple exchanges.
The trend reflects Bernstein’s view that the 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.
