Kalshi and Polymarket Emerge as M&A Targets, Bernstein Says

Kalshi and Polymarket could become acquisition targets as prediction market platforms consolidate across sportsbooks, exchanges and consumer finance, according to a Monday note from Bernstein. The broker's analysts, led by Ian Moore, argued that vertically integrated prediction platforms are setting the stage for a new wave of M&A, with companies that own both consumer distribution and exchange infrastructure capturing more economics in-house.

Kalshi and Polymarket own the exchange stack but trail on distribution, which leaves each as plausibly a target as an acquirer, the analysts wrote. The note tracks a wave of moves over the past eight months: 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.

Why it matters

Prediction markets are converging with sports betting and consumer finance into a single competitive landscape, the report said, opening the door to combinations that previously seemed unlikely: sportsbooks buying exchanges, exchanges buying sportsbooks, and consolidation among sportsbook operators themselves. Even a highly unlikely combination of Flutter and DraftKings would offer strategic benefits by cutting promotional spend and improving customer acquisition efficiency.

The revenue economics are already shifting. 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 routed its highest-volume World Cup contracts through Rothera rather than Kalshi, while DraftKings shifted prediction market trading from CME and Crypto.com onto DKeX in late June.

Market impact

Bernstein views Robinhood and Coinbase as the strongest competitive positions, pairing large consumer audiences with fully owned regulated infrastructure, with DraftKings narrowing the gap through Railbird.