Fanatics is making a major push into prediction markets, announcing Monday that it will buy a federally regulated exchange and clearinghouse from brokerage giant BGC Group. The sports-commerce company will acquire Water Street Labs — a CFTC-registered designated contract market (DCM) — and CX Clearinghouse, a registered derivatives clearing organization (DCO). Terms were not disclosed.
The acquisition gives Fanatics full control of the trading “rails” for its prediction-markets unit, Fanatics Markets (launched in December). Owning both an exchange and a clearinghouse lets Fanatics list and settle event contracts directly on its platform instead of routing orders through third-party operators — a capability viewed as strategically important as firms jockey to capture users and fees in this fast-growing niche.
The move is part of a wider industry land grab. Sports-betting operators such as DraftKings and FanDuel moved into CFTC-regulated event contracts earlier this year, attracted by a federal framework that can reach fans in states where mobile sportsbooks remain banned (for example California and Texas). DraftKings sped up its entry by buying exchange operator Railbird, while FanDuel initially partnered with CME Group before both companies invested in building their own infrastructure. The playbook is shifting toward owning the rails rather than leasing them.
Crypto-native and specialized prediction platforms have also seen explosive growth. Kalshi — a CFTC-regulated exchange focused on event contracts — reported roughly $33 billion in trading volume in June, per Dune Analytics. Combined prediction-market volume across venues including Polymarket, Kalshi, and smaller platforms such as Limitless and Myriad reached about $48 billion so far in July, according to Dune. (Disclosure: Myriad is owned by Dastan, Decrypt’s parent company.) Wall Street has noticed too: ICE, the NYSE parent, invested $1.6 billion in Polymarket.
Analysts see more upside ahead. Bernstein projects prediction-market volumes could hit $1 trillion by 2030 and generate roughly $10.8 billion in revenue, with institutional players expanding contract types beyond sports into economic and political outcomes.
As part of the deal, Fanatics and BGC will also collaborate on market-data products that fuse prediction-market sentiment with traditional financial data — an offering aimed at connecting retail traders and institutional participants. For crypto and DeFi observers, Fanatics’ acquisition signals that mainstream sports and financial firms view prediction markets as a strategic growth avenue and are willing to buy regulated infrastructure to secure long-term control.
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