Fanatics is acquiring Water Street Labs and CX Clearinghouse from BGC Group, enabling the company to operate its own federally regulated prediction market exchange and clearinghouse under CFTC oversight.

The deal gives Fanatics ownership of a Designated Contract Market and a Derivatives Clearing Organization, allowing Fanatics Markets to directly list, execute and clear prediction market contracts without relying on third-party infrastructure as it expands its trading business.

The companies will also partner to build a prediction markets ecosystem to connect retail traders with institutional investors.

Under the partnership, BGC will provide expertise in market infrastructure, liquidity, trading technology and financial market data, while Fanatics contributes its consumer platform and sports-focused customer base. They also intend to launch new analytics products that combine prediction market activity with traditional financial market intelligence.

Fanatics said the acquisition complements recent product launches, including FanCash rewards, Fanatics ONE loyalty integration, Combos, FanViz and new risk management tools, as it continues expanding Fanatics Markets across the US.