Fanatics has agreed to acquire a federally regulated exchange and clearinghouse from BGC Group, giving its prediction markets business direct control over listing and clearing event contracts.
The deal includes Water Street Labs, a Commodity Futures Trading Commission (CFTC)-registered Designated Contract Market (DCM), and CX Clearinghouse, a registered Derivatives Clearing Organization (DCO). Financial terms were not disclosed.
BGC will remain a strategic partner, providing institutional market infrastructure, liquidity and market data.
From Consumer App to Exchange Operator
Since its launch in December 2025, Fanatics Markets has operated as an introducing broker and futures commission merchant, relying on regulated infrastructure provided by Crypto.com Derivatives North America to offer prediction markets.
Owning its own exchange and clearinghouse will allow Fanatics to list and clear contracts directly under its own infrastructure. According to the companies, this will expand the range of prediction markets available on the platform while removing dependence on an external exchange operator.
“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 Matthew King, CEO of Fanatics Betting and Gaming.
Water Street Labs recently received CFTC approval as a Designated Contract Market. Together with CX Clearinghouse, the entities provide the regulated exchange and post-trade infrastructure required to launch and settle event contracts in the United States.
Fanatics Markets is currently available across 23 US states and four territories, offering contracts tied to sports, financial and cultural events alongside its FanCash loyalty programme and Fanatics ONE rewards ecosystem.
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BGC Shifts Focus to Data and Institutional Distribution
While Fanatics assumes ownership of the regulated market infrastructure, BGC will continue to participate through a strategic partnership centred on institutional trading and market data.
The companies said they plan to develop new data products combining prediction market activity with traditional financial market datasets. BGC will also contribute liquidity and trading infrastructure through its institutional businesses.
For BGC, the transaction shifts the emphasis from operating regulated prediction market infrastructure to supplying institutional services around the asset class, including analytics and market data.
The acquisition also places Fanatics alongside Kalshi, giving it direct ownership of the CFTC-regulated exchange and clearing infrastructure underpinning its prediction markets business.
Rather than depending on third-party venues, the company will now own the full exchange and clearing stack supporting its consumer-facing prediction markets platform.
