Fanatics is pushing deeper into prediction markets, striking a deal to acquire a federally regulated exchange and clearinghouse from brokerage giant BGC Group as sports-betting companies race to secure their own market infrastructure.
The sports platform announced Monday it will purchase Water Street Labs, a CFTC-registered designated contract market, and CX Clearinghouse, a registered derivatives clearing organization, from Nasdaq-listed BGC. Financial terms were not disclosed.
Why the Infrastructure Matters
Owning both an exchange and a clearinghouse allows Fanatics to list and settle event contracts directly on Fanatics Markets, the prediction-markets subsidiary it launched in December, rather than routing trades through third-party operators. The acquisition gives the company full control over its regulatory stack, from order matching to final settlement.
The strategy echoes moves by rivals DraftKings and FanDuel, which both entered CFTC-regulated event contracts around the turn of the year. The federal framework lets them reach sports fans in states like California and Texas where mobile sportsbooks remain prohibited. DraftKings accelerated its entry by acquiring exchange operator Railbird, while FanDuel partnered with CME Group before both companies built out their own proprietary infrastructure. Owning the underlying rails rather than leasing them has become the standard playbook across the industry.
A Booming Sector
The acquisition comes as prediction market volumes surge across the board. Crypto-native platform Polymarket and regulated exchange Kalshi have both expanded sharply over the past year. Kalshi alone recorded $33 billion in trading volume in June, according to data from Dune Analytics. Across all major venues, including Polymarket, Kalshi, and Limitless, prediction market trading volume reached $48 billion in July so far, per Dune data.
Wall Street has taken notice. NYSE parent ICE committed $1.6 billion to Polymarket. Bernstein analysts project total prediction market volumes will reach $1 trillion by 2030, with revenue growing to roughly $10.8 billion, and expect institutions to expand trading beyond sports into economic and political contracts.
Data Partnership
As part of the deal, Fanatics and BGC will also collaborate on market-data products that blend prediction-market sentiment with traditional financial data, with the aim of connecting retail and institutional participants on a single information layer.
