Fanatics Acquires Exchange to Expand Prediction Markets Business

Fanatics Acquires Exchange to Expand Prediction Markets Business

In a strategic move to enhance its presence in the growing prediction markets sector, American sports company Fanatics announced its acquisition of Water Street Labs and CX Clearinghouse from BGC Group. This acquisition provides Fanatics with ownership of a federally regulated exchange and clearinghouse, enabling the company to launch and settle its own prediction market contracts.

Expanding Infrastructure in Prediction Markets

The acquisition, with undisclosed financial terms, allows Fanatics greater control over its prediction market offerings. The deal is significant as prediction markets have gained traction over the past year, with market participants wagering on a variety of topics from elections to sports outcomes.

Joining a Booming Financial Sector

Prediction markets are rapidly becoming a popular avenue in finance. They are benefiting from increased visibility, thanks in part to prominent exchanges like Kalshi and Polymarket. The latter even operates on a blockchain, further integrating crypto into the sector. Major players like Coinbase and Robinhood have also ventured into this space, providing users with the ability to partake in prediction markets.

Fanatics’ Vision for Future Growth

With its newly acquired capabilities, Fanatics plans to develop new market data products that merge prediction market activities with traditional financial data. The company anticipates leveraging its extensive sports audience to broaden the appeal of prediction markets and drive consumer engagement.

Previous Developments in the Sector

Fanatics’ own Markets platform, which launched in late 2024, is currently available in 23 states and four U.S. territories. This expansion into prediction markets aligns with a growing trend among sportsbook operators, with competitors like DraftKings signaling intentions to also enter this market.