Published on: April 2, 2026, 04:11h.
Updated on: April 2, 2026, 04:11h.
- Kalshi witnessed significant growth in monthly active users during Q1
- Major sportsbooks have seen a decline
- Mid-tier sportsbook operators may explore mergers to maintain market presence
In the first quarter, Kalshi saw a sharp increase in monthly active users (MAUs), with a portion of these gains coming at the expense of established sportsbooks. This shift could lead to consolidation within the gaming industry, with operators seeking ways to retain their market positions.
In a recent analysis, Sensor Tower reveals that Kalshi’s MAU count skyrocketed to 21% from just 3% a year prior, indicating its growing footprint in the sports betting market. The firm also notes that during the initial quarter of 2026, leading sportsbooks lost market share, a trend that, combined with the robust duopoly of Flutter Entertainment’s (NYSE: FLUT) FanDuel and DraftKings (NASDAQ: DKNG), could catalyze further consolidation or alliances among mid-tier sportsbook operators.
The potential decrease in revenue for smaller operators might catalyze consolidation or foster partnership opportunities with similar businesses or prediction market platforms,” mentioned the research firm.
Sensor Tower highlights that leading sportsbooks such as FanDuel, DraftKings, BetMGM, Caesars Sportsbook, and Penn Entertainment’s (NASDAQ: PENN) theScore all recorded declines in market share from January to March.
Evaluating the Sportsbook M&A Environment
In summary, Sensor Tower suggests that the existing DraftKings/FanDuel dominance, increasing popularity of prediction markets, and the strategic investments by foreign competitors like Bet365 pose challenges for sportsbooks unable to secure a top-tier position.
The impact on mergers and acquisitions activity remains uncertain. Historically, much of the consolidation in sports wagering has focused on enhancing technological capabilities instead of merely acquiring rivals for market share. More recently, some aggressive sportsbooks have sought to purchase firms with the necessary licensing to engage in prediction markets.
Determining where potential mergers could arise in the sports betting arena can be speculative. Caesars Entertainment (NASDAQ: CZR) may itself be a target, while there are strong indications that MGM Resorts International (NYSE: MGM) could aim to acquire the remaining half of BetMGM.
The privately owned Fanatics is making strides in prediction markets through a collaboration with Crypto.com and is unlikely to divest its betting division, despite prior acquisitions designed to strengthen its U.S. sports betting footprint. Additionally, past rumors suggested that Bet365 might consider a complete or partial sale, though these have since quieted.
Contradictory Information
While the Sensor Tower findings suggest that sportsbooks are losing ground to the rise of prediction markets, other studies present differing conclusions. Some analyses indicate that customer attrition from sportsbooks to prediction markets primarily involves experienced bettors, who are often subject to restrictions or may be banned by traditional sportsbooks.
Moreover, other surveys reveal that in jurisdictions where sports betting is legalized, bettors generally favor mobile sportsbooks over yes/no exchanges. Data also suggest that platforms like Kalshi have gained only minor market share from leading operators such as DraftKings and FanDuel.