Fanatics agreed Monday to acquire Water Street Labs, a CFTC-registered designated contract market, and CX Clearinghouse, a registered derivatives clearing organization, from Nasdaq-listed BGC Group. The acquisition enables Fanatics to list and settle event contracts directly on Fanatics Markets, its prediction-markets subsidiary launched in December, rather than routing trades through third parties. The move follows a broader industry trend where sports-betting platforms including DraftKings and FanDuel have acquired or built CFTC-regulated infrastructure to access users in states where mobile sports betting remains prohibited.
Fanatics Acquires CFTC-Registered Exchange and Clearinghouse
Fanatics will purchase Water Street Labs and CX Clearinghouse from Nasdaq-listed BGC Group. Terms of the transaction were not disclosed. Water Street Labs holds CFTC registration as a designated contract market, while CX Clearinghouse operates as a registered derivatives clearing organization. Ownership of both entities allows Fanatics to list and settle event contracts directly on Fanatics Markets without relying on third-party infrastructure.
Under the deal, Fanatics and BGC will partner on market-data products that combine prediction-market sentiment with traditional financial data, connecting retail and institutional participants.
DraftKings and FanDuel Build Proprietary Infrastructure
DraftKings and FanDuel each entered CFTC-regulated event contracts around the turn of the year. DraftKings acquired exchange operator Railbird to accelerate its entry, while FanDuel partnered with CME Group before both companies built proprietary infrastructure. The federal framework enables these platforms to reach sports fans in states like California and Texas, where mobile sportsbooks remain banned.
Prediction Market Volumes Reach $48 Billion in July
Prediction market trading volume across platforms including Polymarket, Kalshi, Limitless, and Myriad stands at $48 billion so far in July, according to data from Dune Analytics. Kalshi alone accounted for $33 billion in trading volume in June. NYSE parent ICE invested $1.6 billion in Polymarket.
Bernstein analysts project prediction-market volumes will reach $1 trillion by 2030, with revenue climbing to approximately $10.8 billion. The analysts expect institutions to expand trading beyond sports into economic and political contracts.
FAQ
What did Fanatics acquire from BGC Group?
Fanatics agreed Monday to acquire Water Street Labs, a CFTC-registered designated contract market, and CX Clearinghouse, a registered derivatives clearing organization, from BGC Group. Terms were not disclosed.
Why are sports-betting platforms acquiring CFTC-regulated infrastructure?
Owning CFTC-registered exchanges and clearinghouses allows platforms to list and settle event contracts directly without third-party intermediaries. The federal framework also enables access to users in states where mobile sports betting is banned, such as California and Texas.
What is the current trading volume in prediction markets?
Prediction market trading volume across platforms stands at $48 billion so far in July, according to Dune Analytics. Kalshi accounted for $33 billion in trading volume in June alone.
