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Fanatics said July 27 it will acquire two BGC Group assets, including a CFTC-registered contract market and a derivatives clearing organization, to launch its own prediction market exchange.
The deal would give Fanatics regulated market infrastructure as it looks to expand Fanatics Markets, its prediction markets subsidiary that already lets users trade on sports outcomes in 23 U.S. states. Financial terms were not disclosed.
Fanatics said it is buying Water Street Labs, LLC and CX Clearinghouse L.P. from BGC Group. According to the company, Water Street Labs is a Commodity Futures Trading Commission-registered contract market, while CX Clearinghouse is a derivatives clearing organization.
As it stands, prediction markets in the U.S. sit at the intersection of derivatives regulation and state gambling law. Fanatics is entering a space that has drawn regulatory scrutiny, particularly around sports-related contracts.
What Fanatics already offers
Fanatics Markets launched in 2025 as the company’s prediction markets unit. The platform allows users to trade on sports outcomes, including game winners, player milestones and tournament champions.
The company said the product is currently accessible in California, Texas, Florida and other states, for a total of 23 jurisdictions.
In a statement included in the announcement, Matt King, CEO of Fanatics Betting and Gaming, said the acquisition could help the company scale further.
“By combining that institutional foundation with Fanatics’ unmatched understanding of fans and consumer engagement, we have a unique opportunity to accelerate the growth of prediction markets and deliver a best-in-class experience for both retail and institutional participants,” King said.
Regulatory questions remain
The announcement did not say when the acquisition is expected to close or whether additional regulatory approvals will be required. It also did not explain how a new exchange would differ from the existing Fanatics Markets product.
Those details matter in a market where operators have already faced pushback. The source notes that prediction market startups such as Kalshi have clashed with state regulators over whether sports-event contracts amount to illegal gambling.
Critics of those platforms argue they are effectively gambling operations, while supporters point to their status under federal derivatives rules. Fanatics’ move adds another major sports betting brand to that debate, but for now the clearest immediate takeaway is that the company is seeking to build on its existing sports-outcome trading business with regulated exchange and clearing assets already in place.
