Fanatics is making a big move in the prediction market space, announcing that it is buying its own prediction market exchange and clearinghouse.
The company announced Monday it entered into an agreement to buy Water Street Labs and CX Clearinghouse from BGC Group Inc.
Water Street Labs is a designated contract market (DCM), and CX Clearinghouse is a derivatives clearing organization (DCO) — and both are registered with the Commodity Futures Trading Commission (CFTC). With this purchase, Fanatics will now be offering its own federally regulated prediction market.
“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,” Matt King, CEO of Fanatics Betting and Gaming, said in a press release. “Their expertise in building and operating regulated exchanges, clearinghouses, trading technology, and institutional market infrastructure makes them an ideal partner. By combining that institutional foundation with Fanatics’ unmatched understanding of fans and consumer engagement, we have a unique opportunity to accelerate the growth of prediction markets and deliver a best-in-class experience for both retail and institutional participants.”
The release goes on to say Fanatics Markets will “connect retail-focused prediction markets with the institutional marketplace for the first time.”
“This represents an important strategic step for BGC to expand our data and analytics capabilities while combining our institutional expertise with Fanatics’ consumer reach,” said John Abularrage, BGC co-CEO. “No one knows the sports fan better than Fanatics, and we believe the acquisition of BGC’s DCM and DCO will supercharge Fanatics Markets. Together, we intend to broaden institutional adoption of prediction markets and create innovative data products that unlock new insights for market participants.”
Last November, Fanatics first entered the prediction market space through a partnership with Crypto.com.
