Fanatics has acquired assets from BGC Group to create a federally regulated prediction market exchange, a move that could bring institutional money into the once-niche world of event-based trading. The deal, announced this week, gives Fanatics the infrastructure and regulatory groundwork to launch a platform that blends sports betting with traditional finance.
The Deal
Fanatics, best known for its sports merchandise and trading card business, is buying the prediction market assets of BGC Group, a global brokerage and financial technology firm. The acquisition includes technology, intellectual property, and regulatory approvals that BGC had already secured from the Commodity Futures Trading Commission (CFTC). Fanatics plans to use these assets to launch a federally regulated exchange where users can trade contracts on the outcomes of sporting events, elections, and other real-world occurrences.
BGC Group had been developing its own prediction market platform but decided to sell the assets as part of a strategic shift. Financial terms of the deal were not disclosed.
Prediction markets have existed for years but have largely operated in a regulatory gray area or offshore. By acquiring a CFTC-regulated entity, Fanatics aims to bring these markets into the mainstream, offering a transparent and compliant venue for trading event-based contracts. This could attract institutional investors who have been hesitant to participate due to legal uncertainty.
The move also signals a convergence between sports betting and traditional finance. Fanatics already holds sports betting licenses in several states, and the new exchange could allow users to trade on game outcomes in a format similar to futures or options. Unlike traditional sportsbooks, which set fixed odds, prediction markets let participants buy and sell contracts, with prices fluctuating based on supply and demand.
Fanatics will need to secure final regulatory approvals from the CFTC before launching the exchange. The company has not announced a specific timeline, but the acquisition provides a ready-made framework that could accelerate the process. If approved, the platform would compete with existing prediction market operators like Kalshi and PredictIt, as well as traditional sportsbooks.
The integration of BGC's technology and regulatory structure is expected to take several months. Fanatics has said it will focus on ensuring compliance with federal laws before opening the exchange to users. The company has not yet disclosed whether the platform will be available to retail customers or limited to institutional investors.
