Fanatics is acquiring two key assets from financial technology and brokerage firm BGC Group as it prepares to launch its own federally regulated prediction market exchange.
Under the deal, Fanatics will acquire Water Street Labs, a Commodity Futures Trading Commission (CFTC)-registered designated contract market, and CX Clearinghouse, a derivatives clearing organization. The acquisitions will enable Fanatics to expand its prediction market operations through its Fanatics Markets subsidiary.
By leveraging BGC Group’s expertise in institutional market infrastructure, liquidity and trading, Fanatics Markets aims to connect retail-focused prediction markets with institutional markets for the first time.
Fanatics to control its own exchange and clearinghouse
By owning its own exchange and clearinghouse, Fanatics Markets will combine its expertise in building consumer-facing platforms with the ability to directly list and clear prediction markets.
The two companies will also collaborate on the development of new market data products. BGC Group will contribute its expertise in market data and analytics to help combine prediction market sentiment with traditional financial market data.
Matt King, CEO of Fanatics Betting and Gaming, said the combination of BGC’s expertise in regulated exchanges, clearinghouses, trading technology and institutional market infrastructure with Fanatics’ understanding of fans and consumer engagement could accelerate the growth of prediction markets.
Fanatics Markets operates in 23 states
Launched in December 2025, Fanatics Markets is currently available across 23 US states, including California, Texas and Florida, as well as four US territories.
Prediction market companies have rapidly expanded their presence in the sports industry in recent years. Kalshi, Polymarket and ADI Predictstreet have emerged as major players through partnerships with leading sports properties.
ADI Predictstreet became FIFA’s first prediction market partner in April. Polymarket has partnered with Germany’s top-flight Bundesliga and Mexico’s Liga MX, while Kalshi recently joined forces with the Pro Padel League.
However, the rise of prediction markets has also triggered regulatory and legal disputes, particularly over contracts linked to sporting events. Companies such as Kalshi have clashed with state regulators over how sports-related contracts should be classified under gambling laws, while critics argue that prediction market platforms effectively operate as illegal gambling businesses.
Fanatics’ acquisition of BGC Group’s market infrastructure assets marks a significant step in the growing convergence between sports fandom, consumer platforms and financial markets.