Fanatics is acquiring a federally regulated exchange and clearinghouse from BGC Group, enabling the sports platform to list and clear prediction markets directly through Fanatics Markets. The deal covers Water Street Labs, LLC, a Commodity Futures Trading Commission-registered Designated Contract Market, and CX Clearinghouse L.P., a CFTC-registered Derivatives Clearing Organization.
Owning the exchange and clearing infrastructure gives Fanatics full control over the markets it offers. The company plans to combine its consumer platform experience with BGC's institutional market infrastructure, liquidity, trading technology and clearing capabilities. Matt King, CEO of Fanatics Betting and Gaming, said BGC are experts in the financial industry who built their business on technology and innovation, and their experience running regulated exchanges and institutional infrastructure makes them the right partner.
Fanatics and BGC will also develop market data products for the prediction sector. BGC will bring its existing analytical capabilities to merge prediction market sentiment with traditional financial market data. John Abularrage, co-CEO of BGC, called the move a strategic step to expand analytical capabilities and combine institutional expertise with Fanatics' consumer reach.
Fanatics Markets operates on iOS, Android and web in 23 states and four US territories. Since launching in December last year, the platform introduced FanCash and Fanatics ONE programmes that let clients earn rewards from trading. BGC is a global brokerage and fintech firm serving financial markets.
