Fanatics, the sports merchandise giant, to own its betting exchange

Fanatics agreed on July 27 to acquire Water Street Labs and CX Clearinghouse from BGC Group (not BCG the consultancy). Should the deal close Fanatics will be bringing in house the exchange and clearinghouse behind its existing prediction market, Fanatics Markets. Financial terms have not been disclosed.

Fanatics is by feel a sports brand, dealing in merchandise and collectibles, as well as sports-related prediction markets. It has at the moment nine NFL-themed futures contracts live on Fanatics Markets, covering such questions as who will be MVP or Coach of the Year. But the site covers more than sports.

Politics, crypto, culture and the economy sit alongside sports in the navigation bar. Fanatics has been selling markets in non-sports areas for a while, and now it’s buying the federal infrastructure to do it directly.

History

Fanatics entered this business by acquiring Paragon Global Markets, an introducing broker, in July 2025.

It partnered with CDNA, a newish trade name for Crypto.com’s CFTC-registered exchange (Nadex), to launch Fanatics Markets in December 2025. Fanatics Markets is now live in 23 states and four US territories.

BGC assets aside, Fanatics has stacked three regulated affiliates under one roof: Paragon as introducing broker; Morton St. Trading Investments as a CFTC-registered futures commission merchant that, by Fanatics’ own account to the CFTC, is not yet operational; and Morton St. Market Maker, an affiliated liquidity provider named in the Fanatics Markets NFL Futures page’s own boilerplate.

The BGC deal adds two pieces. Water Street Labs, a designated contract market, was filed for CFTC registration as recently as December 2025 and was designated this past July, 11 days before the acquisition was announced. CX Clearinghouse, the accompanying derivatives clearing organization, is an older asset. The CFTC’s own filing confirms it as a limited partnership formerly known as Cantor Clearinghouse and registered in 2010. We have one freshly built and one revived component in the same transaction.

That older piece goes back further still. CDNA itself began life as HedgeStreet in 2004, was bought and renamed Nadex by IG Group in 2009, and was then sold to Crypto.com’s parent for $216 million in 2021-22 (Benzinga). Nadex retired its standalone retail trading platform in December 2025, migrating customers to the Crypto.com app. But the legal entity, its rulebook and its regulatory site persist under the Nadex name today.

Direction

Polymarket’s global platform built its reputation on politics, breaking out with the 2020 and 2024 US elections (Britannica Money), but its relaunch under US regulation and the QCEX license, in December 2025, was all about sports, with other markets coming later (Front Office Sports). Kalshi spent its first four years in politics and economics before sports appeared in December 2024 (SGI Europe).

By our count, Kalshi’s Sports and Exotics categories – the latter, as we’ve shown, is sports-derived under a different label – puts sports’ lifetime share of Kalshi’s volume at roughly 85 percent. Kalshi CEO Tarek Mansour, in an interview with Front Office Sports, has cited a narrower measure tracking Sports alone, which stood at 53 percent for the week of June 8.

Fanatics, by contrast, is a sports brand now adding finance, politics and culture. It alone of the three is moving toward financial markets while its own contract volume, to judge by the published data, skews toward sports.

Ownership

Owning both exchange and clearinghouse is the sector’s standard, not a Fanatics invention. Kalshi built its own clearinghouse, Kalshi Klear. Polymarket bought a purpose-built pair, QCEX, for $112 million. What sets Fanatics apart is the buyer, not the structure: Kalshi’s founders, QCEX’s founder and BGC itself all came from finance. Fanatics is a merchandise and collectibles company with no background in financial services.

Legal exposure

Fanatics has not been named in a state cease-and-desist order, but its current backend has. Connecticut’s Department of Consumer Protection ordered KalshiEX, Robinhood Derivatives and Crypto.com (as Foris DAX Asia Pte. Ltd.) to halt sports contracts in December 2025. Tennessee’s Sports Wagering Council sent similar letters in January 2026 to Kalshi, Polymarket and Crypto.com’s North American Derivatives Exchange by name, demanding a halt and refunds by Jan. 31 – as at least eight outlets have reported, citing the letters directly, though this is not confirmed on the regulator’s own site (CoinDesk).

Once it owns Water Street Labs and CX Clearinghouse outright Fanatics will inherit the exposure CDNA carries today – becoming the direct, nameable respondent rather than a licensee once removed.

On Crypto.com

Crypto.com is a brand name rather than a subject-matter limit: CDNA already lists non-crypto contracts, the same breadth Fanatics Markets offers. Crypto.com runs its own consumer-facing mirror of Fanatics Markets, called OG, launched this past Feb. 3 on the same CDNA infrastructure. OG has since said that it plans to offer margin trading, a first for the sector. This is described as “on the roadmap” in the most recent review we’ve found, dated April 2026 (Bettors Insider).

Fanatics has not said whether it will keep any relationship with Crypto.com or CDNA once the BGC deal closes. Its announcement makes no mention of it.

There is a further wrinkle in Fanatics’ press release, which lists crypto as a Phase Two category. CDNA’s own rulebook states that funds deposited and withdrawn from a trading account must be in US dollars, British pounds or euros, so customers may not fund their accounts with crypto, even for the exchange’s own Bitcoin and Ether-linked contracts (whose Settlement Value is fixed at $100 regardless of the underlying asset).

We don’t yet know how or whether Fanatics will square an expansion into crypto markets with an exchange that runs on fiat rails.