Fanatics has agreed to acquire Water Street Labs and CX Clearinghouse L.P. from BGC Group. Water Street Labs is a Commodity Futures Trading Commission registered Designated Contract Market. CX Clearinghouse is a CFTC registered Derivatives Clearing Organization.
The acquisition will let Fanatics offer its own federally regulated prediction market exchange. It will expand prediction market offerings on Fanatics Markets. By owning its own exchange and clearinghouse, Fanatics Markets will combine its consumer platform expertise with the ability to directly list and clear prediction markets. The deal connects retail-focused prediction markets with the institutional marketplace for the first time.
Fanatics and BGC will also partner on new market data in this asset class. BGC will contribute its market data and analytics capabilities. The partnership will enable new client data products combining prediction market sentiment with traditional financial market data.
Fanatics Markets launched in December of last year. It is now available on iOS, Android, and web in 23 states and four US territories. The platform has introduced FanCash, Fanatics ONE, Combos, and FanViz, along with risk management tools for customers.
KEY QUOTES:
“BGC are experts in the financial services industry and, like Fanatics, have built their business on a foundation of cutting-edge technology, innovation, and exceptional talent. Their expertise in building and operating regulated exchanges, clearinghouses, trading technology, and institutional market infrastructure makes them an ideal partner. By combining that institutional foundation with Fanatics’ unmatched understanding of fans and consumer engagement, we have a unique opportunity to accelerate the growth of prediction markets and deliver a best-in-class experience for both retail and institutional participants.”
Matt King, CEO, Fanatics Betting and Gaming
“This represents an important strategic step for BGC to expand our data and analytics capabilities while combining our institutional expertise with Fanatics’ consumer reach. No one knows the sports fan better than Fanatics, and we believe the acquisition of BGC’s DCM and DCO will supercharge Fanatics Markets. Together, we intend to broaden institutional adoption of prediction markets and create innovative data products that unlock new insights for market participants.”
John Abularrage, Co-CEO, BGC Group
