American sports company Fanatics is making a major move into prediction markets, a corner of finance that has exploded in popularity over the past year as traders wager on everything from elections to inflation and sports.
On Monday, the sports merchandiser announced that it has agreed to acquire Water Street Labs and CX Clearinghouse from BGC Group, giving Fanatics ownership of a federally regulated exchange and clearinghouse which allows it to launch and settle its own prediction market contracts. Financial terms were not disclosed.
Through the acquisition, Fanatics will be able to list and clear contracts itself, giving it more control over the products it offers and how quickly it can bring new markets online. Fanatics and BGC also plan to develop new market data products that combine prediction market activity with traditional financial data, the companies said.
Prediction markets have become one of the fastest-growing areas of finance with much of that growth being fueled by CFTC-regulated exchange Kalshi and powerhouse Polymarket, which runs its operations on a blockchain.
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