US sports company Fanatics is taking a major step into prediction markets, a corner of finance that has grown in popularity over the past year as traders bet on everything from elections to inflation and sports.
On Monday, the sports trader announced that it agreed to acquire Water Street Labs and CX Clearinghouse from BGC Group, giving Fanatics ownership of a federally regulated exchange and clearinghouse that allows it to launch and clear its own prediction market contracts. Financial terms were not disclosed.
Through the acquisition, Fanatics will be able to list and settle contracts itself, giving it more control over the products it offers and how quickly it can bring new markets online. Fanatics and BGC also plan to develop new market data products that combine prediction of market activity with traditional financial data, the companies said.
Prediction markets have become one of the fastest growing areas of finance and much of that growth is driven by the CFTC-regulated Kalshi exchange and the powerful Polymarket, which runs its operations on a blockchain.
