Prediction-market operators are pulling trading infrastructure in-house at a fast clip, and Bernstein analysts think that consolidation is setting up a wave of acquisitions across crypto platforms, sportsbooks, brokerages, and standalone exchanges.
In a research report published Monday, Bernstein described what it calls operational consolidation — major platforms merging distribution, brokerage, exchange, and clearing into a single stack. The firm pointed to Robinhood routing World Cup contracts through Rothera (the exchange it co-owns with Susquehanna), DraftKings launching its own DKeX exchange and pulling volume away from CME and Crypto.com, and Coinbase acquiring The Clearing Company while launching event contracts across all 50 states.
Owning the full stack lets platforms keep fees that would otherwise go to external partners. Acquisitions become a faster path to picking up distribution, licenses, or filling gaps in the infrastructure.
But there is a catch. The same convergence that makes deals attractive also draws regulatory heat. Blurring the line between financial trading and gambling creates antitrust concerns and deepens disputes over whether sports event contracts should be regulated as derivatives or gambling products.
That fight is already playing out. Minnesota enacted what the CFTC calls the first outright ban on prediction markets. Illinois now requires platforms to hold a state license before offering sports event contracts. Kalshi has challenged both states, arguing that federally regulated exchanges fall under the CFTC exclusive authority.
The bottom line: consolidation might make commercial sense, but deals could stay difficult to execute until regulators and courts figure out where federal derivatives oversight ends and state gambling authority begins.
