Fanatics Acquires CFTC-Registered Exchange to Expand in Prediction Markets
Fanatics is deepening its involvement in the prediction markets by acquiring a federally regulated exchange and clearinghouse from BGC Group. The company will purchase Water Street Labs, a CFTC-registered designated contract market, along with CX Clearinghouse, both of which are registered derivatives clearing organizations. This acquisition allows Fanatics to list and settle event contracts directly on its subsidiary platform, Fanatics Markets, rather than relying on third-party infrastructure. The move aligns with broader industry trends as major players like DraftKings and FanDuel also expand into CFTC-regulated markets. These companies are drawn by the potential for growth in states where mobile sports betting is restricted but prediction contracts remain accessible. Prediction market trading has surged, reaching $48 billion in volume across platforms such as Kalshi and Polymarket. Industry analysts predict that volumes could reach $1 trillion by 2030 with revenue climbing to about $10.8 billion. Fanatics will also collaborate with BGC on new data products combining prediction market sentiment with traditional financial metrics.