Fanatics to Buy CFTC-Registered Exchange and Clearinghouse to Expand Prediction Markets Push

Fanatics is deepening its bet on prediction markets. The sports commerce company said Monday it will acquire federally regulated market infrastructure from brokerage heavyweight BGC Group, buying Water Street Labs—a CFTC-registered designated contract market (DCM)—and CX Clearinghouse, a registered derivatives clearing organization (DCO). Financial terms were not disclosed. The transaction gives Fanatics direct control over the trading "rails" behind Fanatics Markets, its prediction-markets unit launched in December. By owning both an exchange and a clearinghouse, Fanatics can list and settle event contracts on its own platform rather than routing orders through third-party operators—an advantage seen as increasingly important as competition intensifies for users and fee revenue in the rapidly expanding category. The deal lands amid a broader race to lock up regulated infrastructure. Sports betting leaders DraftKings and FanDuel moved into CFTC-regulated event contracts earlier this year, drawn by a federal framework that can reach customers in states where mobile sportsbooks remain prohibited, including California and Texas. DraftKings accelerated its entry by acquiring exchange operator Railbird, while FanDuel initially partnered with CME Group; both have since invested in building their own market plumbing. The industry playbook is shifting from leasing access to owning it. Prediction-market activity has surged across crypto-native and specialized platforms as well. Kalshi, a CFTC-regulated exchange focused on event contracts, logged roughly $33 billion in trading volume in June, according to Dune Analytics. Dune also estimates combined prediction-market volume across Polymarket, Kalshi, and smaller venues such as Limitless and Myriad totaled about $48 billion so far in July. (Disclosure: Myriad is owned by Dastan, Decrypt's parent company.) Institutional interest is building. ICE, the parent company of the NYSE, invested $1.6 billion in Polymarket. Bernstein forecasts prediction-market volumes could reach $1 trillion by 2030 and generate about $10.8 billion in revenue, with institutional participants broadening contract offerings beyond sports into economic and political outcomes. Fanatics said it will also work with BGC on market-data products that combine prediction-market sentiment with traditional financial data, positioning the offering for both retail traders and institutional clients. For crypto and DeFi watchers, the acquisition underscores how mainstream sports and financial firms increasingly view prediction markets as a strategic growth lane—and are willing to buy regulated infrastructure to secure long-term control.