Fanatics, the international e-commerce and merchandising giant, has acquired a designated contract market and a derivatives clearing organization from global brokerage and financial technology company BGC Group to launch a prediction market exchange.
The firm will buy Commodity Futures Trading Commission-registered contract market Water Street Labs and CX Clearinghouse, which will enable it to offer its own federally regulated prediction market exchange and expand its offerings in this space through the Fanatics Markets subsidiary.
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By utilizing BGC’s specialist offering in institutional market infrastructure, liquidity, and trading, Fanatics Markets will seek to connect retail-focused prediction markets with the institutional marketplace for the first time.
By owning its own exchange and clearinghouse, Fanatics Markets will “combine its proven expertise in building and scaling consumer-facing platforms with the freedom to directly list and clear prediction markets across an expanding opportunity set to Fanatics’ highly engaged customer base.”
In addition, Fanatics and BGC will partner to deliver new market data in this growing asset class, with BGC contributing its established market data and analytics capabilities to enable the development of new client data products that combine prediction market sentiment with traditional financial market data.
Matt King, CEO of Fanatics Betting and Gaming, said: “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.
“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’ 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.”
John Abularrage, BGC co-CEO, added: “This represents an important strategic step for BGC to expand our data and analytics capabilities while combining our institutional expertise with Fanatics' consumer reach.
“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.”
Fanatics Markets launched in December 2025 and is available on digital and online platforms in 23 states, including California, Texas and Florida, and four US territories.
Prediction market companies have increased their presence in the sports market recently, with the likes of Kalshi, Polymarket, and ADI Predictstreet becoming key players through partnerships with major properties in the industry.
ADI Predictstreet was named FIFA's inaugural partner in the prediction market category in April through a multi-year tie-up, appearing prominently throughout the World Cup, which took place in the US, Mexico, and Canada.
Polymarket recently teamed up with German soccer’s top-tier Bundesliga and Mexico’s Liga MX.
Kalshi, meanwhile, partnered with the Pro Padel League earlier this month to expand a stable that already includes the Argentine Football Association, the Croatian Football Federation, Sportradar, and Madison Square Garden Entertainment.
The firm also had a presence at the World Cup through a branding and product partnership with ADI Predictstreet.
However, despite their prominence, prediction market startups such as Kalshi have clashed with state regulators over gambling laws concerning sports contracts.
Critics of the asset class argue that such platforms essentially serve as illegal gambling operations.
