Fanatics, an American sports company, will acquire Water Street Labs, LLC and CX Clearinghouse L.P. from brokerage BGC Group. The acquisition allows Fanatics to launch its own prediction market exchange using these federally regulated assets. Financial terms of the deal were not disclosed.
The announcement was made on July 27. Fanatics Markets, the prediction markets subsidiary of Fanatics, currently operates in 23 U.S. states, including California, Texas, and Florida, as well as four U.S. territories. The platform allows users to trade on sports outcomes such as game winners, player milestones, and tournament champions.
Sources differ on the launch timeline for Fanatics Markets, with some stating it launched in late 2024 or December 2024, while another source indicates a 2025 launch. The sector has seen significant activity recently; DraftKings announced plans for its own prediction market platform in late 2024 and acquired exchange operator Railbird, while DraftKings and FanDuel pushed into CFTC-regulated event contracts around the turn of the year.
Competitors are also expanding their reach. Coinbase partnered with Kalshi to bring prediction markets to its users in 50 states, and Robinhood has begun offering event contracts through Kalshi. FanDuel partnered with CME Group, and NYSE parent ICE invested $1.6 billion in Polymarket. Prediction market startups such as Kalshi have clashed with state regulators over gambling laws concerning sports contracts, particularly in states like California and Texas where mobile sportsbooks are barred.
Critics argue that prediction market platforms are nothing more than illegal gambling operations. Despite this, institutions are expected to broaden trading beyond sports into economic and political contracts. Fanatics and BGC plan to develop new market data products that combine prediction market activity with traditional financial data.
Prediction markets are described as one of the fastest-growing areas of finance, fueled by CFTC-regulated exchange Kalshi and Polymarket. Polymarket and Kalshi have experienced significant growth over the past year, with Kalshi reporting $33 billion in trading volume in June 2025. Bernstein analysts project prediction-market volumes will reach $1 trillion by 2030, with revenue climbing to roughly $10.8 billion.