- The deal covers Water Street Labs and CX Clearinghouse, two CFTC-registered entities BGC Group is selling.
- Water Street Labs lists contracts and CX Clearinghouse settles them, neither licensed nor overseen by state gaming regulators.
- Fanatics Markets launched in December 2025 through a Crypto.com partnership and now covers 23 states and four territories.
- The deal follows a bipartisan House bill filed July 22 to bar sports event contracts from federal exchanges.
NEW YORK – Fanatics agreed on July 27 to buy a CFTC-registered exchange and clearinghouse from BGC Group Inc., a deal that would hand the sportsbook operator the federal infrastructure its sports prediction contracts trade on.
What Fanatics Is Buying
Water Street Labs is a designated contract market registered with the Commodity Futures Trading Commission, the venue where contracts are listed. CX Clearinghouse is a CFTC-registered derivatives clearing organization, the entity that clears and settles them. Owning both places the listing venue and the settlement layer inside one company, a structure that state gaming regulators do not license and do not oversee.
Matt King, chief executive of Fanatics Betting and Gaming, said in the joint announcement that combining BGC’s institutional foundation with Fanatics’ understanding of fans creates “a unique opportunity to accelerate the growth of prediction markets.”
John Abularrage, BGC co-chief executive, said in the same announcement that the two firms want institutional traders taking up prediction markets more widely, and that the trading data those markets throw off can be packaged for clients. BGC is supplying the market data and analytics side of that work, setting what prediction markets show about sentiment against conventional financial figures. Fanatics said its exchange would connect retail prediction markets to the institutional marketplace.
Moving Off A Partner’s Infrastructure
Fanatics Markets launched in December 2025 and has traded since through a partnership with Crypto.com Derivatives North America, itself a CFTC-registered exchange and clearinghouse. The contracts its customers bought were listed and cleared on infrastructure Fanatics did not own. The product runs on iOS, Android and the web across 23 U.S. states and four territories, alongside the other prediction market apps now taking sports action outside state licensing.
Fanatics first moved into the category in November, throwing its hat into the prediction market. Buying a designated contract market changes what the company is asking regulators to accept. It would no longer be a licensed operator distributing someone else’s federally regulated product.
A Federal Registration As Congress Moves
Fanatics runs a state-licensed sportsbook across much of the legal sports betting map. It agreed to buy the federal registrations five days after two Nevada House members moved to bar the sports contracts those registrations support.
Rep. Steven Horsford, D-Nev., introduced H.R. 9856, the Prediction Markets Are Gambling Act, on July 22, with Rep. Mark Amodei, R-Nev., as cosponsor. The bill would amend the Commodity Exchange Act to stop CFTC-registered platforms from listing sports event contracts and casino-style games. Sens. John Curtis, R-Utah, and Adam Schiff, D-Calif., introduced the Senate companion, S. 4160, in March. Sen. Catherine Cortez Masto, D-Nev., is a cosponsor.
If the bill became law, the federal registrations Fanatics is buying would no longer permit the sports contracts the acquisition is meant to support. Neither Fanatics nor BGC disclosed a purchase price or a closing date.
