Fanatics is bringing its prediction market technology in-house by acquiring a trading exchange and clearinghouse that is registered with the Commodity Futures Trading Commission (CFTC).
On Monday, the gaming and merchandise giant announced that it has reached an agreement to acquire Water Street Labs and CX Clearinghouse for an undisclosed price from BGC Group Inc., a New York-based financial services company that reported $2.9bn in revenue in FY2025.
Fanatics’ purchase of Water Street Labs provides the company with its own designated contract market that is registered with the Commodity Futures Trading Commission (CFTC). Meanwhile, CX Clearinghouse is a CFTC-registered derivatives clearing organization. BGC Group first submitted its paperwork to register Water Street Labs with the CFTC in December 2025.
“BGC are experts in the financial services industry and, like Fanatics, have built their business on a foundation of cutting-edge technology, innovation, and exceptional talent,” said Fanatics Betting and Gaming (FBG) CEO Matt King. “Their expertise in building and operating regulated exchanges, clearinghouses, trading technology, and institutional market infrastructure makes them an ideal partner.”
How does the acquisition benefit Fanatics?
Fanatics Markets debuted in December 2025, making the FBG the first sports betting operator to launch a standalone prediction market product. The company facilitated the launch by partnering with Crypto.com to offer the fintech company’s event contracts.
Fanatics Markets also acquired Paragon Global Markets in 2025, a company that is registered with the CFTC and National Futures Association (NFA) as an introducing broker.
- As of July 27, Fanatics Markets offered event contracts in 23 states and four territories
- Fanatics Markets is registered with the CFTC under Morton St Trading Investments
- It is also registered with the NFA as a futures commission merchant (FCM) and swap firm
Now, Fanatics’ deal to acquire Water Street Labs and CX Clearinghouse will allow the company to own and operate its own exchange and clearinghouse to directly offer event contracts to consumers instead of relying on Crypto.com’s products to offer trading.
In addition, the operator and BGC will partner in the prediction markets realm, allowing Fanatics to use BGC’s financial infrastructure and market-making expertise to “connect retail-focused prediction markets with the institutional marketplace for the first time”, according to the press release.
“This represents an important strategic step for BGC to expand our data and analytics capabilities while combining our institutional expertise with Fanatics’ consumer reach,” said BGC Co-CEO John Abularrage. “No one knows the sports fan better than Fanatics, and we believe the acquisition of BGC’s DCM and DCO will supercharge Fanatics Markets. Together, we intend to broaden institutional adoption of prediction markets and create innovative data products that unlock new insights for market participants.”
Fanatics to operate outside the US
Fanatics is bolstering its prediction market after gaining approval last month from the United Arab Emirates Lottery as the country’s first registered iGaming operator.
The company is entering the UAE through a joint venture with Momentum Group, allowing Fanatics to supply its betting and casino technology to several licensed platforms. Momentum is based in Abu Dhabi and operates the UAE Lottery and Play 971.
