Fanatics has agreed to acquire a CFTC-registered exchange and clearinghouse from BGC Group, a deal that would allow the sports platform to list and settle event contracts directly through Fanatics Markets instead of relying on third-party infrastructure.

The company said Monday that it will buy Water Street Labs, a Commodity Futures Trading Commission-registered designated contract market, and CX Clearinghouse, a registered derivatives clearing organization, from Nasdaq-listed BGC. Financial terms of the transaction were not disclosed.

The acquisition would deepen Fanatics' push into prediction markets, a sector that has drawn growing attention from sports-betting companies and financial-market operators. Fanatics launched Fanatics Markets, its prediction-markets subsidiary, in December.

By owning both an exchange and a clearinghouse, Fanatics would be able to list and clear event contracts on its own platform. In CFTC-regulated derivatives markets, designated contract markets provide the venue for trading, while clearing organizations stand between counterparties and handle settlement obligations. That structure would reduce Fanatics' dependence on external venues or clearing providers and put it in control of the regulated market infrastructure supporting Fanatics Markets.

The strategy follows similar moves by major sports-betting rivals. DraftKings and FanDuel moved into CFTC-regulated event contracts around the turn of the year, using a federal regulatory framework that can reach sports fans in states such as California and Texas, where mobile sportsbooks remain prohibited. DraftKings accelerated its entry by acquiring exchange operator Railbird, while FanDuel partnered with CME Group before developing proprietary infrastructure. Across the industry, owning the underlying market rails rather than leasing them has become a common approach.

The broader push comes as prediction-market trading has expanded sharply. Crypto-native venue Polymarket and prediction-market platform Kalshi have both grown over the past year. Kalshi alone accounted for $33 billion in trading volume in June, according to data from Dune Analytics.

Overall prediction-market trading volume, including Polymarket and Kalshi as well as smaller venues such as Limitless and Myriad, has reached $48 billion so far in July, according to Dune data. Disclosure: Myriad is owned by Dastan, Decrypt's parent company.

Traditional financial firms have also moved into the sector. Intercontinental Exchange, the parent company of the New York Stock Exchange, invested $1.6 billion in Polymarket. Bernstein analysts have projected that prediction-market volumes will reach $1 trillion by 2030, with revenue rising to about $10.8 billion. The analysts also expect institutional participation to expand beyond sports markets into economic and political contracts.

As part of the agreement, Fanatics and BGC also plan to collaborate on market-data products that combine prediction-market sentiment with traditional financial data, with the goal of connecting retail and institutional participants. The next practical step for Fanatics will be integrating the acquired regulated infrastructure into Fanatics Markets while operating within the CFTC framework that governs designated contract markets and derivatives clearing organizations.