Acquisition will expand Fanatics Markets’ prediction market offerings and allow the sports platform to own the full technology stack
Fanatics will be able to offer customers its own federally regulated prediction market exchange after agreeing to acquire Water Street Labs and CX Clearinghouse from Nasdaq-listed BGC Group.
By owning its own exchange and clearinghouse, Fanatics Markets will combine its expertise in building and scaling consumer-facing platforms with the freedom to directly list and clear prediction markets to its customer base.
Water Street Labs is a Commodity Futures Trading Commission (CFTC) registered Designated Contract Market (DCM), and CX Clearinghouse is a CFTC registered Derivatives Clearing Organization (DCO).
“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,” said Matt King, CEO of Fanatics Betting and Gaming. “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.”
Fanatics Markets and BGC will also partner to build a prediction markets ecosystem that serves both retail and institutional participants.
“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 BGC co-CEO John Abularrage. “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.”
Launched last December in partnership with Crypto.com, Fanatics Markets is currently available in 23 states including California, Texas and Florida, and four US territories.