Fanatics Moves Deeper Into Prediction Markets With BGC Exchange Deal

What to Know

• Fanatics has agreed to acquire Water Street Labs and CX Clearinghouse from BGC Group.
• The deal gives Fanatics ownership of a federally regulated exchange and clearinghouse for launching and settling prediction market contracts.
• Financial terms of the acquisition were not disclosed.
• Fanatics expects the acquisition to give it more control over product design and the speed at which new markets can be brought online.
• Fanatics and BGC also plan to develop market data products that blend prediction market activity with traditional financial market data.
• The move places Fanatics in a competitive field that includes Kalshi, Polymarket and other emerging event-contract platforms.
• Fanatics Markets launched in late 2024 and is available in 23 states and four U.S. territories.
• Coinbase has partnered with Kalshi to offer prediction markets to users in 50 states, while Robinhood has also offered event contracts through Kalshi.
• DraftKings has also announced plans to launch its own prediction market platform.

Fanatics Pushes Into Regulated Event Trading

Fanatics is taking a significant step into prediction markets, agreeing to acquire Water Street Labs and CX Clearinghouse from BGC Group in a move that gives the sports-focused company control of regulated infrastructure for event-based trading. The transaction gives Fanatics a federally regulated exchange and clearinghouse, allowing it to launch, list, clear and settle its own prediction market contracts rather than relying entirely on outside market plumbing.

The acquisition marks a strategic expansion for a company best known for its sports merchandise and consumer reach. Prediction markets allow users to trade contracts tied to the outcome of real-world events, including sports results, economic data, elections, policy outcomes and other measurable developments. Over the past year, the category has attracted wider attention as retail traders, sports audiences, financial platforms and crypto-native users have converged around event-based speculation.

For Fanatics, the appeal is straightforward: controlling an exchange and clearinghouse can create a more direct path from product idea to live market. Rather than simply distributing contracts built by another platform, Fanatics can shape the structure, timing and settlement framework of markets in-house. That control may matter as the sector becomes more competitive and as platforms race to build products that feel timely, liquid and easy for mainstream users to understand.

Why Exchange and Clearinghouse Control Matters

In prediction markets, the exchange is where contracts are listed and traded, while the clearinghouse handles the post-trade process, including settlement. Ownership of both pieces can be important because event contracts depend on clear rules, reliable market operations and trusted resolution mechanisms. If a contract asks whether a particular event will happen, users need confidence that the market rules are transparent and the outcome will be settled consistently.

By acquiring federally regulated infrastructure, Fanatics gains a platform for building and settling its own contracts under an established regulatory framework. That may give it flexibility in deciding which markets to offer, how quickly to introduce new products, and how to connect event trading to its existing sports audience. The company’s broader consumer base could become a valuable distribution channel if prediction markets continue to move from niche financial products toward mainstream entertainment and trading experiences.

Financial terms of the transaction were not disclosed. That leaves market participants without a clear valuation benchmark for the assets being acquired, but the strategic rationale is visible. Fanatics is not merely testing prediction markets from the edge of the industry; it is acquiring core infrastructure in an effort to compete more directly with platforms already associated with event contracts.

A Crowded Race Led by Kalshi and Polymarket

The deal lands at a time when prediction markets are becoming one of the most closely watched corners of modern finance. Kalshi, a CFTC-regulated exchange, has played a central role in bringing regulated event contracts into the U.S. financial mainstream. Polymarket, meanwhile, has become a major name in the category through blockchain-based operations that helped familiarize crypto users with the idea of trading probabilities around real-world events.

Fanatics now enters a field where brand, distribution, liquidity and regulatory positioning all matter. Kalshi has gained momentum through regulated market structure and partnerships, while Polymarket has benefited from the speed and global familiarity of crypto-native trading culture. Other platforms are also exploring how to package event contracts for sports fans, retail traders and consumers who may not identify as traditional investors but are comfortable making judgments about public outcomes.

Sports may be a particularly important gateway. Fanatics already has a large sports audience, and that audience is naturally familiar with probabilities, odds, outcomes and time-bound events. Prediction markets differ from sports betting in structure and regulatory treatment, but the consumer behavior can feel adjacent: users form a view, express it through a contract, and wait for a verifiable result. That overlap is likely central to Fanatics’ decision to deepen its market infrastructure.

Data Products Could Become a Second Business Line

Beyond event contracts themselves, Fanatics and BGC plan to develop new market data products that combine prediction market activity with traditional financial market data. That part of the deal could become increasingly important as institutions, traders and media companies look for new ways to interpret crowd expectations.

Prediction markets can serve as real-time gauges of perceived probability. When users trade contracts tied to inflation, elections, sports outcomes or other events, prices can reflect collective expectations in a format that is often easier to interpret than commentary alone. By combining this activity with traditional financial market data, Fanatics and BGC may be aiming to create tools that help traders, analysts and commercial partners track how event expectations shift over time.

Such data products could appeal to a broad range of market participants. Financial traders may be interested in how probability markets respond to macroeconomic developments. Sports media and consumer platforms may be interested in how fans price outcomes before and during major events. Crypto participants may continue watching the sector because blockchain-based prediction markets have helped prove that event contracts can attract active communities around transparent, continuously updating probabilities.

Crypto Platforms Helped Push the Category Mainstream

Crypto-native companies have played an important role in expanding public awareness of prediction markets. Polymarket’s blockchain-based model showed how event trading could operate with a digital-native audience accustomed to tokenized markets, on-chain transparency and fast-moving narratives. While Fanatics’ acquisition centers on federally regulated infrastructure rather than a crypto exchange model, the competitive backdrop includes both regulated finance and crypto-linked market culture.

Coinbase has partnered with Kalshi to bring prediction markets to its users in 50 states, extending event contracts into a major crypto platform’s user base. Robinhood has also begun offering event contracts through the same exchange, linking the category to retail brokerage distribution. These partnerships suggest that prediction markets are no longer isolated products for specialist traders. They are becoming features that large consumer finance platforms may use to increase engagement and broaden trading options.

Fanatics is moving into this environment with a different strength: sports fandom and consumer commerce. If it can connect regulated event trading with an audience already engaged around teams, competitions and outcomes, it may be able to attract users who are new to financial-style contracts but familiar with the logic of making outcome-based predictions.

Fanatics Markets Builds on a Late 2024 Launch

Fanatics’ Markets platform launched in late 2024 and is available in 23 states and four U.S. territories. The acquisition of Water Street Labs and CX Clearinghouse adds a deeper infrastructure layer to that rollout. Rather than treating prediction markets as a narrow experiment, Fanatics appears to be positioning the platform as a more durable part of its consumer strategy.

Availability across 23 states and four U.S. territories gives Fanatics a meaningful base, though the company still operates in a sector shaped by regulatory complexity. Event contracts sit at the intersection of financial regulation, consumer protection, political scrutiny and, in some cases, sports-related policy questions. Platforms that expand too quickly without clear controls may face reputational and regulatory risks, while those that move too slowly may lose ground to competitors with more agile product development.

That balance helps explain why owning a regulated exchange and clearinghouse may be valuable. The more Fanatics can control its own market design, clearing and settlement process, the better positioned it may be to respond to demand while maintaining a consistent operating framework.

Sportsbooks Are Also Watching the Opportunity

Sportsbook operators are also moving toward prediction markets, underscoring how closely the category is being watched by companies with large sports audiences. DraftKings announced late last year that it would launch its own platform, adding another major name to a field already shaped by Kalshi, Polymarket, Robinhood, Coinbase and now Fanatics’ infrastructure move.

The convergence does not mean every platform will pursue the same strategy. Some may emphasize finance-oriented contracts tied to economic indicators or public events. Others may lean into sports-related markets, consumer entertainment or data products. Some may prioritize regulated exchange models, while others may continue exploring blockchain-based approaches. What is clear is that event trading is becoming a competitive product category rather than a fringe concept.

For Fanatics, the acquisition could help turn prediction markets into a more integrated business rather than a third-party add-on. The company’s ability to combine consumer reach, sports engagement, regulated infrastructure and potential data products may determine how competitive it becomes against established players. Market participants will now watch how quickly Fanatics brings new contracts online, how it differentiates its markets, and whether its audience translates into meaningful liquidity.

The Bigger Picture for Event-Based Finance

Prediction markets occupy a unique space because they convert opinions about future events into tradable prices. That makes them useful not only for speculation but also for sentiment discovery. When a market is liquid and rules are clear, the price of a contract can offer a constantly updated snapshot of what traders believe is likely to happen.

This is why the sector is attracting companies from finance, sports, consumer technology and crypto. Each sees a different angle: traders see probability and hedging, sports companies see audience engagement, crypto platforms see digital-native markets, and data providers see information value. Fanatics’ acquisition of regulated infrastructure suggests the company wants to participate across several of those layers at once.

The deal does not guarantee that Fanatics will dominate prediction markets, and the sector remains competitive and closely watched. But it does give the company more direct control over the mechanics of event trading at a time when the category is gaining momentum. For a sports company seeking to expand beyond merchandise and into market-based products, owning the exchange and clearinghouse layer is a notable escalation.

Frequently Asked Questions (FAQs)

What did Fanatics agree to acquire?

Fanatics agreed to acquire Water Street Labs and CX Clearinghouse from BGC Group, giving it ownership of a federally regulated exchange and clearinghouse for prediction market contracts.

Were the financial terms disclosed?

No. The financial terms of the acquisition were not disclosed, so the transaction value has not been publicly detailed.

Why is the acquisition important for Fanatics?

The acquisition allows Fanatics to list, clear and settle its own prediction market contracts, giving it more control over products and the speed at which new markets can be introduced.

What are prediction markets?

Prediction markets are platforms where users trade contracts tied to the outcome of real-world events, such as sports results, economic data, elections or other measurable outcomes.

Who are Fanatics’ main competitors in prediction markets?

Fanatics is entering a competitive field that includes Kalshi, Polymarket and other emerging platforms, along with major consumer finance and sports-related companies exploring event contracts.

How does crypto connect to prediction markets?

Crypto-native platforms have helped popularize prediction markets, with Polymarket operating on a blockchain and crypto companies such as Coinbase partnering with Kalshi to expand access to event contracts.

Where is Fanatics Markets available?

Fanatics Markets launched in late 2024 and is available in 23 states and four U.S. territories.

What role could market data products play?

Fanatics and BGC plan to develop products that combine prediction market activity with traditional financial market data, potentially creating new tools for tracking changing expectations around events.

Is DraftKings also entering prediction markets?

Yes. DraftKings announced late last year that it would launch its own prediction market platform, adding to the competitive pressure in the sector.

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