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Fanatics just bought its way deeper into prediction markets. The sports merchandise giant acquired Water Street Labs and CX Clearinghouse from BGC Group, picking up two CFTC-registered entities in a deal whose financial terms were not disclosed.
The purchase is a direct play for infrastructure. Before the deal closed, Fanatics Markets — the company’s prediction-market subsidiary, launched in December — had to route trades through third parties to list and settle event contracts. That’s no longer the case. With Water Street Labs and CX Clearinghouse now under its roof, Fanatics can manage contract listings and settlements in-house, cutting out the middlemen it previously depended on. It’s a cleaner setup, and probably a cheaper one over time, though the company hasn’t spelled out the cost math publicly.
DraftKings, FanDuel Already Moved First
Fanatics isn’t the first major sports-betting name to chase CFTC-regulated event contracts. DraftKings moved fast by acquiring Railbird to speed up its market entry, while FanDuel took a different route — it partnered with CME Group before eventually building out its own systems. The pattern is pretty much the same across all three: own the infrastructure, don’t rent it. Each company seems to have landed on the same conclusion independently, which says something about where the industry thinks this market is going.
And where it’s going looks big. Kalshi alone reported $33 billion in trading volume in June. Total prediction-market trading volumes hit $48 billion in July, per Dune Analytics. Those aren’t small numbers for a sector that, not long ago, was mostly a niche corner of the internet populated by political junkies and sports bettors who couldn’t get action through conventional channels.
Wall Street noticed. NYSE parent ICE put $1.6 billion into Polymarket, a crypto-native prediction platform that’s become one of the most-watched names in the space. That’s a serious check from one of the most establishment financial institutions on the planet, and it kind of signals that the big money isn’t treating prediction markets as a curiosity anymore.
Bernstein Sees $1 Trillion by 2030
Analysts at Bernstein are projecting prediction-market trading volumes will reach $1 trillion by 2030, with revenues climbing to roughly $10.8 billion. The growth, per their read, won’t come just from sports. Economic contracts, political contracts, and other event-based instruments are expected to expand the market well beyond its current base. That’s a meaningful shift — sports betting has always been the obvious entry point, but the real upside probably lives in the broader category of “things people want to bet on,” which turns out to be a very long list.
One structural advantage prediction markets hold over traditional sports-betting platforms is federal regulatory coverage. Because CFTC-registered exchanges operate under a federal framework, they can reach customers in states where conventional sports betting still faces legal barriers. That’s not a minor edge. It means Fanatics Markets, DraftKings, and FanDuel’s prediction-market arms can potentially operate in markets that their sportsbook divisions can’t touch.
As part of the BGC deal, Fanatics and BGC said they plan to work together on market-data products that blend prediction-market insights with conventional financial data. The idea is to serve both retail and institutional investors — basically, give people who trade financial markets a window into prediction-market sentiment, and vice versa. No further details on what those products look like or when they’d launch were disclosed.
The BGC collaboration is worth watching separately from the acquisition itself. Market-data products that pull from prediction markets are still pretty early-stage as a category. If Fanatics and BGC can build something that institutional desks actually use, it could open a revenue stream that looks nothing like the core sports-betting business. Unclear yet whether that’s a near-term priority or more of a long-range ambition.
Prediction Markets Keep Pulling in New Players
The broader picture here is a sector in the middle of a fast consolidation and infrastructure build-out. Platforms like Kalshi and Polymarket are pulling serious volume. Major financial institutions are writing nine-figure checks. Sports-betting companies are snapping up CFTC-registered entities rather than waiting to build organically. It’s a lot of movement in a short window.
Fanatics’ move fits the pattern but also extends it. The company built its name in licensed merchandise, expanded into sports betting, and now it’s buying clearinghouse infrastructure. That’s not a company dabbling — that’s a company making a structural bet that prediction markets are a core business line, not a side experiment.
Whether Fanatics Markets can compete with Kalshi and Polymarket on volume is a separate question, and an open one. Kalshi’s $33 billion June figure is a high bar. But Fanatics has brand recognition, an existing customer base from its sports-betting and merchandise arms, and now direct control over the plumbing that runs its prediction-market operation. That combination isn’t nothing.
The BGC Group deal gives Fanatics the regulatory standing it needed to move faster. Water Street Labs and CX Clearinghouse bring CFTC registration that would have taken time and resources to build from scratch. Buying it was faster. And in a market moving at this speed, faster matters.
Trading volumes for prediction markets reached $48 billion in July.
Frequently Asked Questions
What did Fanatics acquire from BGC Group?
Fanatics acquired Water Street Labs and CX Clearinghouse, both CFTC-registered entities, from BGC Group to support its prediction-market subsidiary, Fanatics Markets. Financial terms of the deal were not disclosed.
How large is the prediction market right now?
Total prediction-market trading volumes reached $48 billion in July, per Dune Analytics, with Kalshi alone reporting $33 billion in trading volume in June. Analysts at Bernstein project volumes will hit $1 trillion by 2030.
