Published on: June 29, 2026, 11:45h.
Updated on: June 29, 2026, 11:45h.
- Research analysts suggest that heightened vertical integration within the prediction market sector may trigger a wave of consolidation.
- Kalshi and Polymarket may face acquisition scenarios due to their delayed distribution capabilities.
- Bernstein also foresees potential M&A activity among major sportsbooks.
As vertical integration gains traction in the prediction market space, a significant consolidation trend may be on the horizon, with Kalshi and Polymarket potentially emerging as acquisition candidates.
This perspective comes from Bernstein analyst Ian Moore and his team, who, in a recent report, highlight that the operators within the prediction market sector are increasingly keen on owning both distribution and infrastructure. This trend could elevate Kalshi and Polymarket—two leading yes/no exchanges—as potential acquisition targets in the near future.
“Kalshi and Polymarket have established the infrastructure but fall short on distribution, making them equally plausible as targets or acquirers,” stated Moore.
In essence, while Kalshi and Polymarket exemplify excellence in the yes/no exchange framework and have the necessary infrastructure, they lag behind in distribution capabilities compared to emerging competitors like Coinbase Global (NASDAQ: COIN), DraftKings (NASDAQ: DKNG), and Robinhood Markets (NASDAQ: HOOD). For instance, Coinbase boasts approximately 9.2 million monthly active users, while Robinhood has around 27.6 million funded accounts.
Identifying Potential Purchasers for Kalshi and Polymarket
Moore recognizes that as consolidation within the prediction markets intensifies, it’s plausible that Kalshi and Polymarket might venture into roles as buyers or sellers.
Should the latter scenario materialize, finding credible buyers within the public market could pose challenges. Currently, the combined market cap of DraftKings and Flutter Entertainment (NYSE: FLUT), another player in the prediction market landscape, stands below $30 billion. Conversely, Kalshi recently completed a $1 billion Series F funding round in March, which valued the firm at $22 billion, while Polymarket holds a valuation of $15 billion.
Recent reports also suggest that Kalshi’s upcoming funding round could result in a remarkable $40 billion valuation. They have hinted at considering an initial public offering (IPO), though that endeavor is not anticipated for 2026.
While the Bernstein analysts didn’t specify potential acquirers for Kalshi or Polymarket, considering their private market valuations and the growing intersection of prediction markets with consumer finance, it’s likely that any acquisitions could originate from the financial services sector rather than the gaming industry.
M&A Opportunities in the Sportsbook Arena
Moore and his team also indicate that heightened M&A activity might extend to sportsbook operators acquiring exchanges—similar to DraftKings’ acquisition of Railbird, which paved the way for the recent launch of DKeX. This could involve trading firms looking to buy sportsbooks for distribution and trading advantages, along with possible mergers among sportsbooks.
When it comes to sports betting consolidation, it is highly probable that DraftKings and Flutter will act as buyers rather than sellers. Notably, the pool of viable domestic acquisition targets for these operators is relatively shallow, though it could broaden if certain casino operators choose to divest their online units.
The Bernstein analysts project a less than 5% likelihood of DraftKings and FanDuel rekindling their merger discussions. This merger was previously stalled in 2017 by the Federal Trade Commission (FTC), resulting in its cancellation.