Fanatics Grabs Its Own Exchange as Sports Platforms Race into Prediction Markets

Fanatics Plants Its Flag in Prediction Markets

Major sports-betting platform Fanatics is making a significant move in the rapidly expanding prediction-market sector by acquiring both an exchange and clearinghouse from BGC Group. The company will take ownership of Water Street Labs, which holds CFTC registration as a designated contract market, along with CX Clearinghouse, a registered derivatives clearing organization. This acquisition enables Fanatics to operate Fanatics Markets—its prediction-market subsidiary launched in December—without depending on third-party intermediaries for trade execution and settlement.

The strategic importance of owning this infrastructure cannot be overstated. By controlling both the exchange and clearinghouse, Fanatics can directly manage how event contracts are listed and settled, giving it operational independence that leasing arrangements would not provide. This mirrors the approach taken by competing giants DraftKings and FanDuel, both of which moved into CFTC-regulated event contracts around the beginning of 2026. DraftKings accelerated its entry through an acquisition of Railbird, an exchange operator, while FanDuel initially partnered with CME Group before developing its own systems. The pattern suggests that owning infrastructure rather than leasing it has become essential strategy in this space.

A Booming Market Attracts Major Capital

The prediction-market sector is experiencing explosive growth. Crypto-native platforms like Polymarket and established prediction markets like Kalshi have seen dramatic expansion, with Kalshi alone processing $33 billion in trading volume during June. Across all major platforms—including Polymarket, Kalshi, Limitless, and Myriad—combined trading volume reached $48 billion in just the first portion of July.

Wall Street has taken notice and begun investing heavily. ICE, the parent company of the New York Stock Exchange, has committed $1.6 billion to Polymarket. Financial analysts at Bernstein have projected that prediction-market volumes could expand to $1 trillion annually by 2030, with total revenue approaching $10.8 billion by that same year. These projections suggest that institutions will increasingly diversify beyond sports-related contracts into economic and political predictions.

Why This Matters for Crypto

The entrance of traditional sports-betting platforms into CFTC-regulated prediction markets represents a convergence of mainstream finance with digital market infrastructure. This development has meaningful implications for crypto broadly. As platforms like Fanatics, DraftKings, and FanDuel move to acquire and build out prediction-market infrastructure, they are validating and legitimizing the underlying market structures that crypto-native platforms pioneered. Additionally, the substantial capital commitments from major financial institutions—such as ICE’s $1.6 billion investment—demonstrate growing institutional confidence in prediction markets as a serious asset class. As mainstream platforms and major financial institutions race to build and acquire prediction-market infrastructure, they’re proving that digital market infrastructure will be central to finance’s future.

Source: Fanatics, via Decrypt. Not financial advice.