Fanatics Acquires CFTC-Registered Exchange to Expand Prediction Market Operations
Sports merchandise company Fanatics has acquired Water Street Labs, a CFTC-registered exchange, and CX Clearinghouse from BGC Group. This move allows Fanatics full control over the infrastructure for its prediction market platform, Fanatics Markets, which it launched in December 2025. The acquisition enables direct listing of contracts and trade settlement without relying on third-party providers. Prediction markets are regulated at the federal level by the CFTC, unlike state-regulated sports betting, offering a pathway into large states such as California and Texas where mobile sportsbooks remain illegal. This strategy mirrors similar moves by DraftKings and FanDuel to vertically integrate their operations for greater control over infrastructure. The deal aligns with an industry trend of prediction market operators acquiring key components like exchanges and clearinghouses, enhancing operational efficiency while reducing reliance on external partners.
Topics: CFTC regulation prediction markets sports betting infrastructure