Fanatics buys regulated exchange in bid to grow prediction markets business
Reported by CoinDesk · AI-assisted summary by ChikoCorp AI News Desk
AI-assisted summary based on the linked source. Verify market-moving details at the original publisher before acting.
American sports merchandise company Fanatics is expanding into the prediction markets sector by acquiring Water Street Labs and CX Clearinghouse from BGC Group. This acquisition gives Fanatics ownership of a federally regulated exchange and clearinghouse that enables it to launch and settle its own prediction market contracts. Financial terms of the deal were not disclosed. This move positions Fanatics to compete with established platforms such as Kalshi and Polymarket, which have contributed to the rapid growth of prediction markets in recent years.
With this acquisition, Fanatics gains more control over listing and clearing contracts, allowing faster rollout of new market offerings. Additionally, Fanatics and BGC plan to collaborate on new market data products that integrate prediction market activity with traditional financial market data. The enhanced control and data integration could help Fanatics tailor its products and potentially attract a broader user base.
Prediction markets have grown significantly, with key players including the CFTC-regulated Kalshi and blockchain-based Polymarket. Crypto-native companies like Coinbase and Robinhood have also integrated prediction markets via Kalshi, expanding their reach to users in many U.S. states. Fanatics' existing Markets platform, launched in late 2024, is available in 23 states and four territories. The company is betting that its large audience in sports can help propel the adoption of prediction markets further into the mainstream.
The development is noteworthy because it underscores the growing interest in prediction markets as a financial product and highlights an entry by a major sports-related company into this space. This sector's expansion influences how event-based contracts are packaged and sold, potentially impacting the broader financial and retail trading landscape. Fanatics’ move signals a trend of increasing integration between traditional sports audiences and emerging financial markets.