Prediction market operators integrating trading infrastructure in-house could increase mergers and acquisitions across crypto platforms, sportsbooks, brokerages and independent exchanges, an analysis showed.

According to a Cointelegraph report, Bernstein said in a recent report that the prediction market industry is rapidly entering an operational integration phase.

Bernstein highlighted a trend of major platforms seeking direct control across the prediction market stack. With distribution, brokerage, exchange and clearing functions being brought together within a single platform, sectors that were previously separate have entered the same competitive landscape, it said.

The trend is also reflected in recent moves by major companies. Robinhood processed major World Cup-related contracts through Kalshi and a jointly owned exchange, RoTera. DraftKings launched DKeX and shifted trading volume from CME and Crypto.com infrastructure. Coinbase acquired The Clearing Company and also launched event contracts.

By owning infrastructure directly, platforms can keep in-house the fees that previously went to external partners. Acquisitions may also be faster than building in-house to secure distribution networks, licences and lacking infrastructure at once.

Still, such integration is unlikely to translate quickly into large deals. Bernstein said regulatory scrutiny is one of the key barriers blocking major consolidation in the prediction market industry. While combinations can improve profitability and reduce dependence on external parties, they can trigger antitrust reviews and escalate disputes over whether sports event contracts should be seen as financial derivatives or gambling products, Cointelegraph reported.