Fanatics deepens its prediction market push by buying a regulated exchange and clearinghouse, while tastytrade becomes the first brokerage to integrate event contracts through Apex’s turnkey infrastructure. The two moves underscore a broader race among platforms to own the pipes of CFTC-supervised prediction markets and embed them directly into retail investor accounts.
Fanatics agreed on July 27 to acquire Water Street Labs and CX Clearinghouse from BGC Group (Nasdaq: BGC). Water Street Labs earned its Designated Contract Market status from the Commodity Futures Trading Commission on July 16, only 11 days before the deal was announced. CX Clearinghouse—formerly Cantor Clearinghouse—has held a Derivatives Clearing Organization registration since April 2010. The acquisition gives Fanatics ownership of a fully regulated exchange and clearing apparatus, allowing it to list and settle event contracts on its Fanatics Markets platform without relying on outside infrastructure.
Fanatics Markets launched in December 2025 via a partnership with Crypto.com Derivatives North America, which provided the initial exchange listing. The company had already acquired Paragon Global Markets, a CFTC-registered introducing broker, in July 2025. With the BGC deal, all four pieces of regulated derivatives infrastructure—introducing broker, exchange, clearinghouse, and the customer-facing platform—are now under Fanatics control. CEO Matt King said BGC’s expertise in building regulated exchanges and trading technology made them “an ideal partner.” BGC Co-CEO John Abularrage noted the deal would let both firms “broaden institutional adoption of prediction markets and create innovative data products.” Financial terms were not disclosed.
Separately, tastytrade opened its Prediction Markets suite, offering retail customers CFTC-regulated event contracts tied to Federal Reserve decisions, inflation reports, employment data, market volatility, commodities, and cryptocurrencies—all within the same brokerage account used for stocks, options, and futures. The launch is powered by Apex Fintech Solutions’ turnkey futures commission merchant infrastructure, lowering the technical and regulatory burden for brokers wanting to add event contracts. Contracts settle in a binary yes/no structure, quoted between $0.01 and $0.99, and can be traded around the clock. Tastytrade’s initial lineup concentrates on macroeconomic and financial outcomes, aligning with its active options and futures user base.
The two developments are part of an arms race in prediction market M&A. DraftKings, Robinhood, Polymarket, and Underdog have all bought CFTC registrations in 2025–2026 rather than building them from scratch. Coinbase expanded Kalshi-powered prediction markets to all 50 states, while Robinhood chased contracts from multiple exchanges. Owning CFTC-registered infrastructure doesn’t eliminate legal tensions: Kalshi and Polymarket still face state-by-state lawsuits and cease-and-desist orders, despite recent federal court rulings suggesting the CFTC holds primary authority over such contracts. Fanatics could encounter similar challenges as it pushes sports-linked contracts into new jurisdictions.
BGC shares traded at $11.79 on July 27, up about 1.2%. Fanatics is privately held.
