"This acquisition marks a significant step for our prediction markets," said a source close to Fanatics. The sports and entertainment company announced plans on July 27 to acquire Water Street Labs and CX Clearinghouse from BGC Group, gaining ownership of a federally regulated exchange and clearinghouse. These entities, registered with the Commodity Futures Trading Commission (CFTC), will allow Fanatics to bring its prediction market operations fully in-house, moving away from reliance on third-party platforms.
Water Street Labs was designated as a contract market by the CFTC just days before the announcement, underscoring its compliance with federal oversight. CX Clearinghouse, registered since 2010, handles clearing of fully collateralized futures, options on futures, and swaps. Fanatics Markets currently operates its prediction services in 23 states and 4 U.S. territories through a partnership with Crypto.com Derivatives North America, which began in December 2025. Now, by owning core infrastructure like the exchange and clearinghouse, Fanatics plans to list and settle event contracts internally, enabling expanded offerings beyond its current scope.
The deal’s financial details and completion timeline remain undisclosed, yet it aligns with Fanatics’ earlier moves, including the 2025 acquisition of Paragon Global Markets, a CFTC-registered introducing broker. Owning the exchange and clearing operations will help Fanatics reduce dependence on external providers, although existing collaborations might continue. also BGC will stay involved as a data partner, blending prediction market insights with its traditional financial analytics, an arrangement expected to enhance institutional trading intelligence.
This consolidation reflects a broader trend of firms integrating prediction market infrastructure amid increasing regulatory scrutiny and demand for solid platforms. Fanatics’ strategy to internalize these components could set a precedent for other operators seeking tighter control over contract listings and settlement processes.
