Fanatics is taking a direct route into regulated prediction markets, announcing it’s buying Water Street Labs and CX Clearinghouse from BGC Group. That gives Fanatics both sides of the core market structure: Water Street Labs is registered with the Commodity Futures Trading Commission as a designated contract market, and CX Clearinghouse is a CFTC-registered derivatives clearing organization.
In practice, that means the exchange can list and match event contracts, while the clearinghouse manages collateral, settlement, and counterparty risk after the trade is placed. Owning both means Fanatics is no longer limited to acting mainly as a consumer-facing front end routing users to another regulated venue.
Fanatics says the acquisition will let it offer its own federally regulated prediction market exchange and expand contract listings on Fanatics Markets. Earlier disclosures showed that some Fanatics event contracts were listed and cleared by Crypto.com’s North America derivatives venue, so this move brings more of that activity in house. The key watchpoint is how quickly Fanatics uses that regulated infrastructure to build out Fanatics Markets within federal rules.