Fanatics is doubling down on prediction markets, moving from offering a platform to owning the regulated infrastructure behind it.
The sports-commerce giant announced it will acquire Water Street Labs — a CFTC-registered designated contract market — and CX Clearinghouse, a registered derivatives clearing organization, from brokerage BGC Group (terms were not disclosed). Those assets will sit under Fanatics Markets, the prediction-markets arm the company launched in December, letting Fanatics list and settle event contracts on its own rails instead of routing trades through third parties.
Why that matters: control of both an exchange and a clearinghouse gives Fanatics end-to-end control over trade execution and settlement — a capability competitors are racing to secure. DraftKings moved quickly into the CFTC-regulated space by buying exchange operator Railbird, while FanDuel teamed up with CME Group before building its own plumbing. Owning the “rails” has become the industry default as firms try to capture the growth and regulatory clarity the CFTC framework offers — including access to big states like California and Texas where mobile sportsbooks remain limited.
The move comes amid a surge in activity across both crypto-native and regulated prediction venues. Polymarket and Kalshi have seen rapid expansion: Kalshi logged about $33 billion in trading volume in June, according to Dune Analytics, and total prediction-market volume — including Kalshi, Polymarket and smaller platforms like Limitless and Myriad — reached roughly $48 billion so far in July (Dune). Institutional interest is following: ICE (NYSE’s parent) invested $1.6 billion in Polymarket, and Bernstein projects prediction-market volumes could hit $1 trillion by 2030 with about $10.8 billion in revenue as institutions broaden activity beyond sports into economic and political contracts.
Fanatics and BGC also plan to partner on market-data products that fuse prediction-market sentiment with traditional financial data, aiming to bridge retail and institutional users.
Disclosure: Myriad is owned by Dastan, the parent company of Decrypt.
Bottom line: Fanatics’ acquisition signals that mainstream sports and finance players see prediction markets — including crypto-native venues — as a strategic growth area. Owning regulated exchanges and clearinghouses is becoming a key competitive move as these platforms scale and seek deeper institutional participation.
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