Sports merchandiser Fanatics is acquiring a CFTC-regulated exchange and clearinghouse from BGC Group to expand its prediction markets business. The deal, with undisclosed terms, allows Fanatics to list and settle its own contracts, mirroring rivals like DraftKings. The move comes as the prediction market sector booms, with analysts projecting $1 trillion in volume by 2030 and institutional players like ICE investing heavily.
Fanatics acquisition of BGC infrastructure
- ▪The financial terms of the acquisition were not disclosed
- ▪Fanatics is acquiring Water Street Labs, a CFTC-registered exchange, and CX Clearinghouse, a clearing organization, from BGC Group
- ▪The acquisition allows Fanatics to list and settle its own prediction market contracts directly, without relying on third parties
Proprietary exchange ownership trend
- ▪Rival DraftKings entered the market by acquiring exchange operator Railbird, while FanDuel initially partnered with CME Group
- ▪This strategy allows operators to reach customers in states where mobile sports betting is banned, such as California and Texas
- ▪Owning proprietary infrastructure, or "the rails," has become the default strategy for companies in the prediction market sector
Prediction markets growth trajectory
- ▪Leading platform Kalshi recorded $33 billion in trading volume in June 2026, while total market volume reached $48 billion in July 2026
- ▪Fanatics launched its Markets platform in late 2024 and it is available in 23 states and four U.S. territories
- ▪Prediction markets are a fast-growing area of finance, with traders wagering on topics ranging from elections to sports
- ▪Bernstein analysts project prediction market volumes will reach $1 trillion by 2030, with revenues of roughly $10.8 billion
Institutional expansion beyond sports
- ▪As part of the deal, Fanatics and BGC Group will partner to develop new market-data products
- ▪Institutions are expected to expand trading beyond sports into economic and political contracts
- ▪NYSE parent company ICE invested $1.6 billion in Polymarket, while Coinbase and Robinhood have partnered with Kalshi
- ▪These new data products will blend prediction-market sentiment with traditional financial data
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