Fanatics to Acquire Exchange and Clearinghouse From BGC Group to Expand Fanatics Markets

Fanatics plans to acquire a federally regulated exchange and clearinghouse from BGC Group, a move that would give the sports platform the infrastructure to list and clear prediction markets directly through its own Fanatics Markets app rather than routing trades through an outside partner. The deal covers Water Street Labs, LLC, a Commodity Futures Trading Commission-registered Designated Contract Market, and CX Clearinghouse L.P., a CFTC-registered Derivatives Clearing Organization.

The acquisition would let Fanatics operate its own federally regulated prediction market exchange while expanding the range of contracts it can offer through the platform. Owning both pieces of the pipeline, rather than leasing access to someone else’s, hands Fanatics direct control over which markets it builds and how quickly it can bring new ones to customers.

Why Fanatics Wants to Own the Plumbing

Prediction markets only work if there’s a regulated venue to list contracts and a clearinghouse to guarantee the trades behind them. Most operators in the space lease that infrastructure from a partner exchange. Fanatics, by buying Water Street Labs and CX Clearinghouse outright, is instead building that layer in-house — a structural shift that mirrors what sportsbooks did years ago when they moved from white-label platforms to proprietary tech stacks.

“BGC are experts in the financial services industry and, like Fanatics, have built their business on a foundation of cutting-edge technology, innovation, and exceptional talent,” said Matt King, CEO of Fanatics Betting and Gaming. “Their expertise in building and operating regulated exchanges, clearinghouses, trading technology, and institutional market infrastructure makes them an ideal partner. 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.”

BGC, a global brokerage and financial technology company, will also work with Fanatics on market data products, contributing its analytics capabilities to build tools that combine prediction market sentiment with traditional financial market data. “This represents an important strategic step for BGC to expand our data and analytics capabilities while combining our institutional expertise with Fanatics’ consumer reach,” said John Abularrage, BGC Co-CEO. “No one knows the sports fan better than Fanatics, and we believe the acquisition of BGC’s DCM and DCO will supercharge Fanatics Markets. Together, we intend to broaden institutional adoption of prediction markets and create innovative data products that unlock new insights for market participants.”

A Crowded, Fast-Moving Race

The move lands in the middle of what’s become one of the most competitive corners of the betting industry. Kalshi remains the volume leader in U.S. event contracts, with Polymarket close behind after its own U.S. push, while Robinhood, Crypto.com, and newer entrants like Novig and ProphetX have all secured CFTC clearances of their own this year. DraftKings and FanDuel have each said they expect to spend between $200 million and $300 million standing up their own prediction market products, with spending accelerating around major events like the World Cup and the start of football season.

Fanatics Markets launched in December last year and is now live on iOS, Android, and the web across 23 states and four U.S. territories, rewarding users through FanCash and Fanatics ONE. Bettors comparing prices across platforms can already see how tightly matched the odds have become between traditional Fanatics Sportsbook markets and their event-contract equivalents, a dynamic that’s likely to sharpen further as more operators bring their infrastructure in-house.

Bringing exchange and clearing functions under one roof also gives Fanatics more room to move on pricing and product design without waiting on a third-party venue’s approval — a structural advantage as the prediction markets sector continues to expand well beyond its original niche in politics and economics into sports, entertainment, and other real-world events.