Fanatics has agreed to acquire Water Street Labs and CX Clearinghouse from BGC Group (NADAQ:BGC). It is a deal that will give the sports platform its own regulated infrastructure for prediction markets.
Water Street Labs is a Commodity Futures Trading Commission-registered designated contract market, while CX Clearinghouse is a registered derivatives clearing organisation. Owning both means Fanatics Markets can directly list and clear prediction markets itself, rather than routing trades through an external exchange partner.
The deal also carries a data partnership: BGC will contribute its market data and analytics capabilities so the pair can build products blending prediction-market sentiment with traditional financial data, aimed at both retail and institutional users.
"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," said Matt King, chief executive of Fanatics Betting and Gaming.
BGC co-chief executive John Abularrage said the acquisition would "supercharge Fanatics Markets" and help broaden institutional adoption of the asset class.
The move builds on a rapid expansion that began when Fanatics bought brokerage Paragon Global Markets in July 2025, then launched Fanatics Markets in partnership with Crypto.com late last year, growing from 10 states to the 23 states and four US territories it covers today.
Rivals have moved in parallel: DraftKings entered prediction markets via its Railbird acquisition, and FanDuel partnered with CME Group, underscoring the scramble among sportsbooks to add event-contract products.
Financial terms of the BGC transaction were not disclosed.
News Intelligence what this means for the company
Fanatics is acquiring Water Street Labs and CX Clearinghouse from BGC Group, giving it direct control over a CFTC-registered exchange and clearinghouse for prediction markets rather than depending on external partners. The deal also locks in a data partnership with BGC to blend prediction-market sentiment with traditional financial data for institutional and retail products. This vertical integration removes a dependency and positions Fanatics to scale its prediction-market offering—which has already expanded from 10 states to 23 states and four US territories since launch—without routing constraints.
- Fanatics Betting and Gaming now owns the infrastructure layer of its prediction-market stack, reducing operational friction and potential disputes with external exchange operators as volumes grow.
- The BGC data partnership creates a moat: blending institutional-grade market data with Fanatics' consumer engagement expertise is harder for competitors to replicate without similar infrastructure or data access.
This acquisition strengthens Fanatics' control over its prediction-markets business model and removes a scaling bottleneck. The move signals confidence (or a bet) that prediction markets can be a durable revenue stream, not a passing trend.
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Content is for informational purposes only, not financial advice.
