Fanatics Buys CFTC-Registered Exchange in Prediction Markets Land Grab

Fanatics is buying its way deeper into prediction markets, striking a deal to acquire a federally regulated exchange and clearinghouse from brokerage giant BGC Group as sports-betting heavyweights race to stake out ground in the fast-growing sector.

The sports platform said Monday it will purchase Water Street Labs, a CFTC-registered designated contract market, and CX Clearinghouse, a registered derivatives clearing organization, from Nasdaq-listed BGC. Terms weren’t disclosed.

Owning both an exchange and a clearinghouse lets Fanatics list and settle event contracts directly on Fanatics Markets, the prediction-markets subsidiary it launched in December, rather than routing trades through third parties.

The move mirrors a broader stampede. Rivals DraftKings and FanDuel each pushed into CFTC-regulated event contracts around the turn of the year, drawn by a federal framework that lets them reach sports fans in states like California and Texas, where mobile sportsbooks remain barred. DraftKings fast-tracked its entry by acquiring exchange operator Railbird, while FanDuel partnered with CME Group before both built out proprietary infrastructure. Owning the rails, rather than leasing them, has become the industry’s default playbook.

The land grab reflects surging bets on the category’s trajectory. Crypto-native venue Polymarket and leading prediction market platform Kalshi have exploded over the past year, with Kalshi alone accounting for $33 billion trading volume in June, per data from Dune Analytics. Prediction market trading volume across the board—including Polymarket and Kalshi, along with smaller venues such as Limitless and Myriad—now stands at $48 billion so far in July, per data from Dune. (Disclosure: Myriad is owned by Dastan, Decrypt’s parent company.)

Wall Street has piled in too, with NYSE parent ICE investing $1.6 billion in Polymarket. Bernstein analysts project prediction-market volumes will reach $1 trillion by 2030, with revenue climbing to roughly $10.8 billion, and expect institutions to broaden trading beyond sports into economic and political contracts.

Under the deal, Fanatics and BGC will also partner on market-data products that blend prediction-market sentiment with traditional financial data, connecting retail and institutional participants.