NewsPrediction Markets3 min read
Fanatics Acquires Regulated Exchange to Expand Into Prediction Markets
Fanatics is expanding beyond sports betting with the acquisition of CFTC-regulated exchange infrastructure, laying the foundation for its own prediction markets platform.
GamblingLore Editorial Desk29 July 2026
Fanatics has taken another major step beyond sports merchandise and betting, announcing the acquisition of a federally regulated exchange and clearinghouse as it looks to establish a larger presence in the rapidly growing prediction markets sector.
The deal sees Fanatics acquire Water Street Labs, a designated contract market (DCM), and CX Clearinghouse, a derivatives clearing organization (DCO), from BGC Group. Both entities are regulated by the U.S. Commodity Futures Trading Commission (CFTC), giving Fanatics the infrastructure required to launch and operate its own prediction market contracts.
While financial terms of the transaction were not disclosed, the acquisition represents one of Fanatics' most significant strategic investments since entering the sports betting market.
A Strategic Expansion
Prediction markets have emerged as one of the fastest-growing segments in financial and sports trading over the past year, with platforms such as Kalshi and Polymarket attracting increasing attention from both retail users and institutional investors.
Rather than relying on third-party exchanges, Fanatics will now own the underlying exchange and clearing infrastructure itself. This allows the company to list, settle, and manage contracts internally while accelerating the rollout of new products under its own regulatory framework.
The move aligns with Fanatics' broader ambition of becoming a complete sports ecosystem. After building businesses across merchandise, collectibles, sports betting, and digital experiences, prediction markets now appear to be the company's next area of focus.
More Than Just Sports Betting
Owning a regulated exchange provides Fanatics with significantly greater flexibility than operating solely as a sportsbook. Prediction markets allow users to trade contracts based on the likelihood of real-world events occurring, spanning sports, politics, economics, and other global events.
The acquisition also positions Fanatics to capitalize on growing interest in event-based trading, an area that continues to blur the lines between traditional financial markets and sports wagering.
Alongside the acquisition, Fanatics and BGC Group announced plans to collaborate on future market data products, combining prediction market activity with broader financial market insights.
Competition Continues to Intensify
Fanatics enter a market that has become increasingly competitive over the past year. Companies such as Kalshi and Polymarket have experienced rapid growth as consumer demand for prediction markets continues to rise, while regulators work toward clearer frameworks governing event contracts in the United States.
By acquiring regulated exchange infrastructure instead of building it from scratch, Fanatics gains a faster route into the market and positions itself to compete with established operators as prediction markets continue their move into the mainstream.
The acquisition marks another milestone in Fanatics' evolution from a sports merchandise retailer into one of the most diversified companies operating across the sports, gaming, and financial technology industries.
