Fanatics became the first major sportsbook operator to launch a prediction market when the Fanatics Markets offering, which allows access to contracts made by Crypto.com, went live Wednesday.
Fanatics CEO Michael Rubin told CNBC last week that the company was preparing to launch a prediction market – including sports contracts – via a partnership with Crypto.com.
Fanatics launch comes after buying broker
As first reported by InGame last month, Fanatics quietly bought some or all of a Wall Street business named Paragon Global Markets, which functions as an introducing broker, and reports indicate it is using this status to operate. An introducing broker sends clients to a designated contract market (DCM) – in this case Crypto.com – but does not technically hold client funds. Behind–the-scenes movement of money can make this fact go unnoticed.
As an introducing broker, Fanatics has more regulatory clarity than Crypto.com’s other partners — such as Underdog and Truth Social — which are legally tech providers to the exchange rather than having a formal registration with the Commodity Futures Trading Commission (CFTC), as is required of an introducing broker.
First major sportsbook to launch
The move makes Fanatics the first major sportsbook operator to launch its prediction market platform. DraftKings and FanDuel are preparing to launch their own products. DraftKings bought CFTC-registered exchange Railbird in October while FanDuel will partner with commodities giant CME.
Daily fantasy operators Underdog, which also offers a sportsbook in North Carolina, and PrizePicks already have prediction market offerings, with access to contracts from Crypto.com and Kalshi, respectively.
Ahead of their prediction market launches, DraftKings and FanDuel last week left the American Gaming Association (AGA), which opposes sports event contracts. Fanatics is still listed as a member. An AGA spokesperson did not immediately respond to InGame‘s request for comment on Fanatics’ membership status.
Fanatics Markets live in 10 states
The Fanatics Markets product is live in Alaska, Delaware, Hawaii, Idaho, Maine, New Hampshire, North Dakota, Rhode Island, South Dakota, and Utah.
It plans to launch in 14 more states later this week: Alabama, California, Florida, Georgia, Minnesota, Mississippi, Nebraska, New Mexico, Oklahoma, Oregon, South Carolina, Texas, Washington, and Wisconsin.
In most of those states, online sportsbooks are not legal. Florida, Oregon, Delaware, Rhode Island, and New Hampshire operate monopolies, and so Fanatics’ sportsbook is unavailable in those states as well.
Terms and conditions stipulate that Fanatics Markets users must be 21 or older. CFTC-registered products are generally allowed to be offered to users who are 18 or older.
The prediction market offers trades on sports, politics, and financial indicators, but also promised that there were “more markets coming soon” on topics including crypto, music, weather, and culture.
Fanatics won’t be ‘stupid’ with marketing
“For years, Fanatics has given fans new ways to enhance their fandom through team merchandise, collectibles, tickets, gaming, events and more,” Fanatics Betting and Gaming CEO Matt King said in a statement to CNBC. “Now, with Fanatics Markets, we’re giving fans a safe and intuitive way to engage with the moments that move sports and culture, and to pick a side and profit along the way if their prediction is correct.”
In an interview with Sportico, King added that Fanatics would not be “stupid” with the marketing of the product.
“We’ll strike the right balance of still being aggressive and making the most of being early in the market, but we’re going to avoid stupid,” he said. “It’s a lot easier to do that once you’ve seen a rodeo.”
FanDuel last month revealed that it may lose up to $350 million before the end of 2026 on its prediction market offering.
