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Fanatics agrees to buy CFTC-registered exchange and clearinghouse from BGC Group

Fanatics agrees to buy CFTC-registered exchange and clearinghouse from BGC Group

The deal would give Fanatics in-house federally regulated exchange and clearing licenses as sports-betting rivals adopt the same strategy to expand prediction market offerings into states where mobile sportsbooks are restricted.

Fact Check
BGC Group's official press release confirms Fanatics will acquire Water Street Labs (a CFTC-registered Designated Contract Market) and CX Clearinghouse (a CFTC-registered Derivatives Clearing Organization), giving Fanatics in-house federally regulated exchange and clearing licenses to speed prediction market launches. CoinDesk corroborates the acquisition of a regulated exchange to grow its prediction markets business. This matches every element of the claim.
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Summary

Fanatics has agreed to acquire Water Street Labs and CX Clearinghouse from BGC Group, bringing federally regulated exchange and clearing infrastructure in-house for its prediction market business. Water Street Labs is registered with the Commodity Futures Trading Commission as a designated contract market, while CX Clearinghouse is a CFTC-registered derivatives clearing organization. Financial terms were not disclosed. The deal would let Fanatics list and settle event contracts directly on Fanatics Markets rather than relying on third-party infrastructure, giving it greater control over how quickly products are launched and managed. Fanatics and BGC also said they plan to develop market-data products that combine prediction market activity with traditional financial market information. The move comes as sports-betting and trading firms race deeper into CFTC-regulated event contracts, which offer a federal route to reach customers in states such as California and Texas where mobile sports betting remains unavailable. DraftKings acquired Railbird to accelerate its entry, while FanDuel partnered with CME Group before building out its own infrastructure. The sector's growth has also been driven by platforms such as Kalshi and Polymarket. Kalshi recorded $33 billion in trading volume in June, and total prediction market volume across venues including Polymarket, Kalshi, Limitless and Myriad reached $48 billion so far in July, according to Dune Analytics. Bernstein analysts project prediction market volumes will reach $1 trillion by 2030, with revenue rising to about $10.8 billion.

Terms & Concepts
  • designated contract market: A CFTC-regulated exchange authorized to list and trade derivatives contracts.
  • derivatives clearing organization: A CFTC-regulated clearinghouse that settles derivatives trades and manages counterparty risk.
  • prediction market: A market where participants trade contracts tied to the outcome of future events.