Fanatics to buy BGC Group assets to launch prediction market exchange

July 27 (Reuters) - Fanatics, a global sports platform, will acquire a designated contract market and a derivatives clearing organization from brokerage BGC Group BGC.O to launch its own prediction market exchange, the companies said on Monday.

Here are more details from the announcement:

• Fanatics will buy Commodity Futures Trading Commission-registered contract market Water Street Labs, LLC and CX Clearinghouse L.P. from BGC.
• The financial terms of the deal were not revealed in the announcement.
• Fanatics Markets, launched in 2025 as the prediction markets subsidiary of Fanatics, allows users to trade on sports outcomes such as game winners, player milestones and tournament champions.
• The platform is accessible in 23 U.S. states — including California, Texas and Florida. The deal will also help Fanatics to expand its prediction market offerings.
• Prediction market startups such as Kalshi have clashed with state regulators over gambling laws concerning sports contracts. Critics of the asset class argue that such platforms are nothing more than illegal gambling operations.
• "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," said Matt King, CEO of Fanatics Betting and Gaming.