The BGC deal would give Fanatics Markets control of a full CFTC-regulated stack, sharpening its competition with DraftKings Predictions and FanDuel Predicts amid a wave of prediction market acquisitions
Fanatics has agreed to acquire Water Street Labs and CX Clearinghouse from BGC Group, a global brokerage and financial technology company. The deal will give the sports apparel and online gaming company its own federally approved and regulated prediction market exchange and clearinghouse.
The acquisition would allow Fanatics to directly list and clear event contracts offered through its prediction market platform, Fanatics Markets, rather than relying entirely on outside exchange infrastructure. Fanatics Markets, which launched in December, currently offers contracts listed by Crypto.com’s CFTC-regulated exchange.
The companies also said BGC would contribute its expertise in institutional market infrastructure, liquidity and trading, with the partnership intended to connect Fanatics’ retail-focused platform with institutional market participants.
“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,” Fanatics Betting and Gaming CEO Matt King said in Monday’s announcement. “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’ unmatched 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.”
The companies did not disclose the purchase price or an expected closing date.
Fanatics continues acquisition trend
Water Street received its designation as a CFTC-regulated designated contract market (DCM) on July 16. As DeFi Rate reported when the exchange was approved, Water Street is owned by BGC, although the financial services company declined at the time to disclose its plans for the venue. The acquisition agreement was announced just 11 days after the designation.
Fanatics is the latest prediction market operator to acquire companies that already hold CFTC registrations rather than build a new exchange operation entirely from scratch. DraftKings, Robinhood, Polymarket and Underdog have made similar acquisitions.
Fanatics takes control of full market stack
Fanatics already operates the customer-facing side of Fanatics Markets through Paragon Global Markets, its registered introducing broker, and Morton St. Trading Investments, its registered futures commission merchant. Adding Water Street and CX Clearinghouse would give the company control of the exchange that lists its contracts and the clearinghouse that processes and guarantees them.
That would give Fanatics more freedom to decide which markets to offer, how quickly to introduce new products and whether to make its contracts available through other brokers or consumer platforms. The announcement did not say when Water Street expects to begin listing Fanatics contracts or whether Fanatics Markets will continue offering contracts from Crypto.com after the transaction closes.
BGC will sell the two regulated entities but remain involved through a separate partnership focused on institutional participation, trading infrastructure and market data. The companies said they plan to connect Fanatics’ retail customer base with BGC’s network of institutional market participants and develop data products combining prediction market sentiment with traditional financial market information.
“This represents an important strategic step for BGC to expand our data and analytics capabilities while combining our institutional expertise with Fanatics’ consumer reach,” BGC Co-CEO John Abularrage said in the announcement. “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.”
The announcement does not indicate that BGC will retain an ownership stake in Water Street or CX Clearinghouse. Instead, the partnership appears to leave Fanatics in control of the regulated venues while BGC continues contributing institutional market expertise, liquidity connections and data capabilities.
Sports gaming companies deepen prediction market push
Fanatics Markets was the first prediction market platform launched by the sportsbook companies now competing most directly in the space, preceding DraftKings Predictions and FanDuel Predicts.
DraftKings has since made the most aggressive public push of the three, acquiring Railbird and using the CFTC-regulated exchange as the foundation of DraftKings Predictions. FanDuel has taken a quieter, partnership-led approach, initially offering contracts from CME Group before adding markets from Crypto.com and its OG Prediction Markets.
Fanatics’ agreement with BGC marks a significant escalation of its own prediction market strategy. Although Fanatics beat DraftKings and FanDuel to market, it initially launched as an intermediary offering contracts listed by Crypto.com. Acquiring Water Street and CX Clearinghouse would allow Fanatics to compete with DraftKings through infrastructure it directly controls while becoming more vertically integrated by owning both the exchange and clearinghouse.
The move is part of a larger migration into prediction markets by companies already focused on sports gaming. Fantasy sports operators including PrizePicks and Underdog have added event contracts, while sports-focused exchange platforms Novig and ProphetX have entered the federally regulated market after previously offering peer-to-peer sports trading products under other models.
Fanatics Markets expands beyond distribution
Fanatics Markets is currently available in 23 states and four U.S. territories, including California and Texas, where conventional online sports betting remains unavailable.
Since launching in December, the platform has added parlay-style combination contracts, its FanViz market visualization feature, risk-management tools and rewards through its FanCash rewards program.
Fanatics also partnered with ADI Predictstreet, FIFA’s official prediction market partner for the 2026 World Cup, to launch a dedicated tournament hub featuring event contracts alongside schedules, player data and other World Cup content. The contracts continued to be listed by Crypto.com’s CDNA exchange, with ADI contributing its FIFA relationship and branding rather than operating the underlying markets.
If completed, the deal would immediately strengthen Fanatics’ position in the prediction market race by giving it control over the exchange and clearing infrastructure behind its products rather than leaving it dependent on outside providers.
