Fanatics buys BGC exchange to build out prediction markets

Fanatics agreed to buy Water Street Labs and CX Clearinghouse from BGC Group, a move that would give it its own federally regulated exchange and clearinghouse for prediction markets. The financial terms were not disclosed, and the deal would let Fanatics list and clear contracts itself.

Water Street Labs is a CFTC-registered designated contract market, while CX Clearinghouse is a CFTC-registered derivatives clearing organisation. Fanatics said owning both pieces will let Fanatics Markets expand its prediction-market offerings and control its full infrastructure.

Fanatics Markets is available on iOS, Android and the web in 23 states and four U.S. territories. The company said the platform has added FanCash, Fanatics ONE, Combos, FanViz and consumer-protection tools meant to help users manage exposure and trade responsibly.

Fanatics and BGC also plan to work together on market-data products. Fanatics said BGC will contribute market-data and analytics capabilities so the companies can build client products combining prediction-market sentiment with traditional financial market data.

Matt King, Fanatics Betting and Gaming’s chief executive, said BGC’s experience in regulated exchanges, clearinghouses, trading technology and institutional market infrastructure made it an ideal partner. BGC co-chief executive John Abularrage said the acquisition should expand institutional adoption of prediction markets and create new data products, adding: “No one knows the sports fan better than Fanatics.”

The deal comes as the Commodity Futures Trading Commission has been moving to define the rules around event contracts, commonly called prediction markets. In a June proposal, the agency said prediction markets are growing quickly, with trading volume across CFTC-registered prediction markets exceeding $25 billion in 2025, and said a market offering event contracts to the public must register as a designated contract market and comply with listing requirements. The CFTC also proposed defining the term “gaming” and adding a rule on when event contracts “involve” an underlying activity; comments were due by 27 July.