Bernstein Flags Kalshi ($40B) and Polymarket ($15B) as M&A Targets for DraftKings
DKNG•Analysts at Bernstein expect a surge in M&A among prediction markets as companies like DraftKings eye acquisitions of Kalshi (valued at $40B) and Polymarket ($15B) to gain distribution and operational scale. Consolidation could cut promotional spending, improve efficiencies and retain revenue previously lost to third parties.
1. Consolidation Outlook
Bernstein forecasts an upcoming wave of mergers and acquisitions in the prediction market space as sports betting, consumer finance and event wagering converge. Kalshi and Polymarket own core exchange technology but lack the broad distribution networks needed to scale, making them prime targets.
2. DraftKings' Acquisition Strategy
DraftKings is identified alongside Robinhood and Coinbase as a logical acquirer looking to expand its prediction market footprint. Pursuing M&A would allow DraftKings to shortcut distribution challenges and integrate complementary platforms into its existing betting ecosystem.
3. Valuations and Strategic Rationale
Kalshi carries a $40 billion valuation and Polymarket $15 billion, reflecting their technology assets and market positions. Acquiring these platforms could reduce promotional spending, improve operational efficiencies and capture revenue that currently flows to third-party exchanges.
