Fanatics Buys Its Way Into Prediction Markets
Matthew Leo · Published July 27, 2026 · Business & Policy
Fanatics no longer wants to place its prediction markets on someone else’s infrastructure. It wants to own the exchange underneath them.
The sports-commerce and betting company announced on July 27 that it has agreed to acquire Water Street Labs and CX Clearinghouse from financial-technology company BGC Group.
Water Street Labs is registered with the US Commodity Futures Trading Commission as a designated contract market. CX Clearinghouse is registered as a derivatives clearing organization.
The financial terms were not disclosed.
What Fanatics is buying
If completed, the transaction would give Fanatics infrastructure for listing event contracts and processing the resulting trades through its own federally regulated exchange and clearinghouse.
The company says the purchase will let Fanatics Markets expand beyond its current offerings and create new data products with BGC.
The companies’ announcement says Fanatics Markets is currently available through iOS, Android and the web in 23 American states and four territories.
It allows customers to trade contracts based on sports outcomes such as game winners, tournament champions and player milestones. The service is not available in Canada.
Prediction markets are colliding with sports betting
Prediction-market companies present their products as federally regulated financial contracts. State gambling regulators and other critics argue that sports contracts can function much like wagers while bypassing state betting rules.
Reuters reported that companies in the sector have already clashed with state regulators over that distinction.
Fanatics is especially important in this debate because it already operates a conventional sportsbook. Owning both a betting brand and prediction-market infrastructure makes the line between those products harder for ordinary users to see, even if regulators classify them differently.
Owning the plumbing creates more control
An exchange lists contracts and matches trades. A clearinghouse handles obligations between buyers and sellers. Controlling both can give Fanatics more flexibility over which markets it offers, how quickly it introduces them and what data it produces.
It also gives the company more responsibility when markets are confusing, poorly designed or open to manipulation.
Fanatics’ own disclosure warns that event contracts can result in the loss of an entire investment and are not appropriate for everyone. Users must be at least 21, and availability varies by state.
The acquisition agreement does not settle the larger regulatory argument. It does show where Fanatics believes the industry is heading: sports, finance, trading technology and gambling-like entertainment are being pulled into the same application.
Regulators may continue debating what to call it. Fanatics is buying the machinery while they do.
Tags: Fanatics Markets, prediction markets, financial technology, sports business