Bernstein Identifies Kalshi, Polymarket as M&A Targets

Analysts at Wall Street investment bank Bernstein have identified prediction market platforms Kalshi and Polymarket as potential acquisition targets, forecasting a wave of industry consolidation as the lines between sports betting, financial exchanges, and consumer finance blur. In a research report published on Monday, June 29, the analysts argued that a strategic push by major platforms to control their own trading infrastructure is setting the stage for increased merger and acquisition activity.

The central trend, described as operational consolidation, involves consumer-facing platforms bringing distribution, brokerage, exchange, and clearing functions in-house. This vertical integration allows companies to retain fees that previously flowed to third-party partners, improving profitability. Bernstein cited several recent moves as evidence, including Robinhood routing major FIFA World Cup contracts through Rothera, an exchange it jointly owns with Susquehanna; DraftKings launching its DKeX exchange and shifting volume away from external providers like CME and Crypto.com; and Coinbase acquiring The Clearing Company and launching its own event contracts.