American sports apparel giant Fanatics has officially announced a strategic move to enter the prediction market industry, which is currently experiencing a surge in popularity. Fanatics agreed to acquire Water Street Labs and CX Clearinghouse from BGC Group. This move gives Fanatics full ownership of the federally regulated exchange and clearinghouse.
Through the acquisition, Fanatics now has full independent control to list and settle prediction market contracts. The main benefit of owning this exchange is the acceleration of the launch process for new products and the direct settlement of contract transactions. Although the deal has been reached, both parties chose not to disclose the financial value of the transaction.
Prediction markets have grown rapidly over the past year, becoming one of the fastest-growing financial sectors. On these platforms, market participants or traders can bet on various future events, ranging from election outcomes and inflation rates to sports match results. This trend is also driven by the presence of crypto-based platforms and blockchain technology like Polymarket, as well as regulated exchanges like Kalshi.
In addition to Fanatics, major financial companies such as Coinbase and Robinhood have also integrated prediction contracts into their services. Fanatics is optimistic that its massive sports customer base will serve as a strong asset to expand the reach of prediction markets to a broader consumer base. Fanatics' own prediction market division has been operating since late 2024 and currently spans 23 states in the United States.
