Fanatics is set to enhance its prediction market operations by acquiring a trading exchange and clearinghouse registered with the Commodity Futures Trading Commission (CFTC). On Monday, the company announced that it has reached an agreement to purchase Water Street Labs and CX Clearinghouse from BGC Group Inc., a New York-based financial services firm that reported $2.9 billion in revenue for fiscal year 2025.
With this acquisition, Fanatics will have its own designated contract market recognized by the CFTC, while CX Clearinghouse serves as a CFTC-registered derivatives clearing organization. Notably, BGC Group initiated the registration process for Water Street Labs with the CFTC back in December 2025.
Matt King, CEO of Fanatics Betting and Gaming (FBG), expressed confidence in the partnership, stating, "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. Their expertise in building and operating regulated exchanges, clearinghouses, trading technology, and institutional market infrastructure makes them an ideal partner."
The acquisition is poised to significantly benefit Fanatics. Its prediction market, Fanatics Markets, was launched in December 2025, marking FBG as the first sports betting operator to introduce an independent prediction market product. This initiative was made possible through a collaboration with Crypto.com, focusing on offering event contracts. In addition, Fanatics Markets previously acquired Paragon Global Markets in 2025, a company also registered with the CFTC and National Futures Association (NFA) as an introducing broker. As of July 27, Fanatics Markets provided event contracts across 23 states and four territories. It is registered with the CFTC under Morton St Trading Investments and holds registration as a futures commission merchant (FCM) and swap firm with the NFA.
By acquiring Water Street Labs and CX Clearinghouse, Fanatics will now own and manage its own exchange and clearinghouse. This will empower the company to directly provide event contracts to users, eliminating reliance on Crypto.com for trading products. Furthermore, the collaboration with BGC is expected to leverage their financial infrastructure and market-making expertise to integrate retail-focused prediction markets with the institutional market.
John Abularrage, Co-CEO of BGC, emphasized the strategic importance of this deal, stating, "This represents an important strategic step for BGC to expand our data and analytics capabilities while combining our institutional expertise with Fanatics’ consumer reach. 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."
In an expansion of its operations beyond the United States, Fanatics recently secured approval from the United Arab Emirates Lottery, becoming the first registered iGaming operator in the UAE. The company plans to enter the UAE market through a joint venture with Momentum Group, which will allow Fanatics to provide its betting and casino technology to various licensed platforms. Momentum Group operates the UAE Lottery and Play 971, and is based in Abu Dhabi.
