Fanatics to Acquire Exchange and Clearinghouse from BGC; Parties to Partner on Prediction Markets

Builds a prediction markets ecosystem that serves both retail and institutional participants, bringing together differentiated market expertise and datasets that combine prediction market and financial market intelligence

Fanatics, a global sports platform, and BGC Group Inc, (Nasdaq: BGC) ("BGC"), a leading global brokerage and financial technology company servicing financial markets, announced today that they have entered into an agreement for Fanatics to acquire Water Street Labs, LLC and CX Clearinghouse L.P. from BGC. The acquisition of Water Street Labs, a Commodity Futures Trading Commission (CFTC) registered Designated Contract Market (DCM), and CX Clearinghouse, L.P., a CFTC registered Derivatives Clearing Organization (DCO), will enable Fanatics to offer its own federally regulated prediction market exchange and expand its prediction market offerings on Fanatics Markets.

With its own exchange and clearinghouse, Fanatics Markets will own its full prediction markets infrastructure, combining its proven expertise in building and scaling consumer-facing platforms with the freedom to directly list and clear prediction markets across an expanding opportunity set to Fanatics' highly engaged customer base. By harnessing BGC's expertise in institutional market infrastructure, liquidity, and trading, Fanatics Markets will connect retail-focused prediction markets with the institutional marketplace for the first time.

In addition, Fanatics and BGC will partner to deliver new market data in this growing asset class with BGC contributing its established market data and analytics capabilities to enable the development of new client data products that combine prediction market sentiment with traditional financial market data.

"BGC are experts in the financial services industry and, like Fanatics, have built their business on a foundation of cutting-edge technology, innovation, and exceptional talent," said Matt King, CEO of Fanatics Betting and Gaming. "Their expertise in building and operating regulated exchanges, clearinghouses, trading technology, and institutional market infrastructure makes them an ideal partner. 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."

"This represents an important strategic step for BGC to expand our data and analytics capabilities while combining our institutional expertise with Fanatics' consumer reach," said John Abularrage, BGC Co-CEO. "No one knows the sports fan better than Fanatics, and we believe the acquisition of BGC's DCM and DCO will supercharge Fanatics Markets. Together, we intend to broaden institutional adoption of prediction markets and create innovative data products that unlock new insights for market participants."

Fanatics Markets is available on iOS, Android and on the web in 23 states and four U.S territories. Since its debut in December of last year, Fanatics Markets has ushered in a new era of loyalty and rewards with the introduction of FanCash and Fanatics ONE - giving customers an experience where trades can earn rewards. Fanatics Markets also introduced Combos, FanViz and consumer protections that equip customers with Risk Management tools to help manage exposure, trade responsibly and make informed trading decisions.