CoinDesk
Fanatics has agreed to acquire Water Street Labs and CX Clearinghouse from BGC Group, giving the sports merchandising giant ownership of a federally regulated exchange and clearinghouse. The move lets Fanatics list and settle its own prediction market contracts in-house, cutting the dependency on third-party infrastructure and accelerating how quickly new markets can go live. Financial terms were not disclosed.
Why it matters
Prediction markets have become one of the fastest-growing corners of finance over the past year, with CFTC-regulated Kalshi and blockchain-native Polymarket leading the charge. Coinbase has already partnered with Kalshi to distribute event contracts across 50 states, and Robinhood is offering the same products through the same venue. Fanatics is now betting that its massive sports audience, a consumer base that dwarfs most fintech platforms, can push prediction markets into an even broader demographic. The company's Markets platform launched in late 2024 and is already live in 23 states and four U.S. territories.
Market impact
The acquisition also sets up a new data revenue line: Fanatics and BGC plan to develop market data products that blend prediction market activity with traditional financial data, a combination that could attract institutional interest beyond the retail sports bettor. DraftKings announced a similar push late last year, signaling that the prediction market land grab among consumer-facing platforms is accelerating. For the broader sector, every new regulated entrant with distribution scale raises the legitimacy floor and the competitive pressure on incumbents.
Frequently asked questions
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What exactly did Fanatics acquire from BGC Group?
Fanatics agreed to acquire Water Street Labs and CX Clearinghouse from BGC Group, giving it ownership of a federally regulated exchange and clearinghouse that allows it to list and settle its own prediction market contracts. Financial terms were not disclosed.
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How does this deal change Fanatics' position in prediction markets?
Previously dependent on third-party infrastructure, Fanatics can now control its own product pipeline, bringing new event contracts to market faster and keeping more of the economics in-house rather than routing through an external exchange.
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Which platforms does Fanatics now compete with directly?
Fanatics enters direct competition with CFTC-regulated Kalshi and blockchain-native Polymarket, as well as consumer platforms like Coinbase and Robinhood that distribute event contracts through Kalshi, and DraftKings which announced its own prediction market platform late last year.
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What is the new market data product Fanatics and BGC plan to build?
The two companies plan to develop data products that combine prediction market activity with traditional financial market data, a hybrid offering that could attract institutional clients beyond Fanatics' core retail sports audience.
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How large is Fanatics' existing prediction market footprint before this deal?
Fanatics' Markets platform launched in late 2024 and is currently available in 23 U.S. states and four U.S. territories, giving it an existing distribution base to build on with the newly acquired regulated infrastructure.
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