Fanatics Buys BGC's Regulated Exchange for Prediction Markets
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- Fanatics agreed to acquire Water Street Labs and CX Clearinghouse from BGC Group, gaining a federally regulated exchange and clearinghouse to run its own prediction markets business (financial terms undisclosed).
- Through the deal, Fanatics will list and clear prediction market contracts itself, giving it direct control over product offerings and how quickly it can bring new markets online.
- Fanatics and BGC also plan to co-develop new market data products that combine prediction market activity with traditional financial market data.
- Fanatics' Markets platform launched in late 2024 and is currently available in 23 states and four U.S. territories — the acquisition upgrades its infrastructure rather than marking a greenfield entry.
- Kalshi (CFTC-regulated) and Polymarket (blockchain-based) have fueled the prediction market boom, with Coinbase partnering with Kalshi to reach users in 50 states and Robinhood offering event contracts through the same exchange.
- DraftKings announced late last year it would launch its own prediction markets platform, joining sportsbook operators eyeing the same consumer base Fanatics is targeting.
Why it matters: Fanatics moves from being a prediction market tenant to owning its own federally regulated rails, letting it launch contracts faster than competitors still renting capacity from Kalshi. With DraftKings also building its own platform and Coinbase/Robinhood already live via Kalshi, Fanatics' sports audience and self-clearing infrastructure become the differentiator in a market where speed of product rollout matters.
