Major prediction market platforms are rapidly transitioning from using third-party infrastructure to operating their own exchanges, according to recent Bernstein analysis. DraftKings, Robinhood, and Coinbase have all recently brought matching, clearing, and regulatory capabilities in-house rather than continuing to pay external venues for access.
DraftKings launched DKeX using technology and CFTC licensing acquired through Railbird, integrating the exchange directly into its consumer app after reaching approximately three billion dollars in annualised prediction volume. Robinhood partnered with Susquehanna to rebrand MIAXdx as Rothera, routing major contracts including World Cup markets through its proprietary venue instead of third-party provider Kalshi. Robinhood has already processed over sixteen billion event contracts year-to-date. Meanwhile Coinbase acquired The Clearing Company to internalise clearing functions shortly after launching its event contracts product, achieving roughly one hundred million in annualised revenue within two months.
The infrastructure shift reflects expectations of dramatic market expansion. Bernstein projects prediction market volumes will reach two hundred forty billion dollars in 2026, representing growth of three hundred seventy percent year-over-year, potentially hitting one trillion dollars annually by 2030. This growth is attributed to anticipated federal regulatory clarity and blockchain-enabled tokenisation improving liquidity conditions.
For platforms relying solely on distribution without owning underlying exchange infrastructure, the competitive position increasingly resembles a rented rather than defensible asset as margin capture moves upstream.
FXnCO Insight
Firms operating under CFD or derivatives licences should evaluate whether prediction market infrastructure ownership presents regulatory arbitrage opportunities or compliance risks within their existing authorisation scope.
Source: Finance Magnates