Fanatics moves into prediction markets amid rising demand for speculative trading

Abi Bray

4 December 2025 at 6:19am UTC-5

Source: Fanatics Betting and Gaming

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Sportsbook operator Fanatics has entered the prediction markets sector, offering users in 24 states the ability to trade contracts tied to outcomes in sport, finance, politics, and culture.

The move comes as event-contract platforms face increased scrutiny from regulators who argue the products are more like gambling than investment tools.

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Fanatics’ entry, which was first revealed last month, adds new competition to a market dominated by well-funded operators such as Kalshi and Polymarket.

Several platforms have had to restrict access to their products due to potential regulatory hurdles at the state level.

Fanatics Betting and Gaming Chief Executive Matt King said, “We believe that the core of this customer demographic will be very much aligned with the heart of where sports fans are, and that’s typically men between the ages of 25 and 45.”

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He added that Fanatics has been in contact with regulators, given the shifting regulatory landscape surrounding such products.

Fanatics’ event contract offering is being developed in partnership with Crypto.com’s North American derivatives arm. King said the sector remains early in its development and “you can’t really say anybody is established.”

Polymarket and Kalshi recently hit a record trading volume of US$10 billion in November, marked by retail growth, deeper platform integrations, and a steady stream of news events.

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The Backstory

Why Fanatics is betting on event contracts now

Fanatics has been telegraphing a push beyond traditional sportsbooks for months, courting a fast-growing audience that treats outcomes as tradeable assets. In late November, CEO Michael Rubin confirmed the company would launch a prediction app with Crypto.com in “the next couple of weeks,” signaling a pivot toward event contracts that mirror the mechanics of retail trading. That plan, now crystallizing, builds on the company’s broader strategy to convert its sports merchandising reach into betting and finance-adjacent products. The confirmation came via Fanatics confirms entry into prediction markets with Crypto.com, which also noted the company’s 23-state sportsbook footprint and intent to target remaining pockets of demand.

Fanatics’ appetite grew as rivals demonstrated the scale of the opportunity and the limits of conventional sports wagering. Earlier reporting that Fanatics and Crypto.com were in talks to launch a joint platform hinted at how fast the category was evolving and how attractive partnerships with regulated exchanges had become. Those early signals are detailed in Fanatics reportedly in prediction market talks with Crypto.com, which framed the pitch: bring tradable, news-driven markets to a sports-savvy retail base without the constraints of a single-state sportsbook model.

Wall Street money changes the competitive calculus

As Fanatics refines its product, deep-pocketed financial firms are already reshaping the market structure. Chicago-based Jump Trading has begun making markets on sports event contracts at Kalshi, importing professional liquidity into retail-facing products. The firm’s move, reported in Financial trading firm Jump Trading hops onboard sports event markets trend, underscores how prediction markets are converging with electronic trading playbooks. Jump, which previously built a London team to trade Betfair, also backed Sporttrade and has argued the United States market needs a model that looks more like an exchange than a book.

Capital is following. Kalshi’s latest round raised an additional $1 billion, lifting its valuation to $11 billion, more than double its Series D in September, according to the same report. Rival Polymarket drew a $2 billion investment from Intercontinental Exchange, parent of the New York Stock Exchange, valuing the platform at $8 billion. Those numbers put pressure on would-be entrants to scale quickly, differentiate on product and prove regulatory durability. They also suggest tighter spreads, more liquid markets and a faster cadence of listings as professional market makers enter the fray.

Fanatics aligns its pitch with that momentum. The company has emphasized that the core demographic for event contracts overlaps with its fan base of men ages twenty-five to forty-five, a cohort already comfortable with mobile trading and live sports. That overlap could supercharge customer acquisition if the firm can convert merchandise, cards and sportsbook users into prediction traders, then cross-sell across its ecosystem.

Regulatory crosscurrents complicate the runway

The promise of tradable events comes with a moving target of rules. As exchanges expand into politics, finance and sports, federal derivatives regulators and state gaming authorities are still drawing lines between investment products and gambling. Friction is rising. In Washington, a new lawsuit by a fantasy operator illustrates how licensing decisions can bottleneck entrants and advantage rivals. In Sleeper Markets sues Commodity Futures Trading Commission over alleged license interference, the company alleges the CFTC directed the National Futures Association not to approve its futures commission merchant application after the NFA deemed it complete. Sleeper says a competitor’s similar application won approval during the delay and is asking a federal court to block further interference and affirm eligibility under the Commodity Exchange Act.

The case gets to the heart of the sector’s identity crisis. If event contracts are futures, firms need futures permissions and must meet derivatives market rules. If they are gambling, they face state-by-state licensing and advertising limits. Many platforms now thread both regimes, segmenting product menus by jurisdiction and user verification. Fanatics’ tie-up with Crypto.com’s North American derivatives arm is a nod to that reality, positioning the company to route activity through regulated channels while it navigates state prohibitions.

Statehouse pushback raises consumer stakes

Even as financial-regulatory questions play out, governors and legislatures are reassessing online gambling’s scope and social impact. Ohio has become a test case. Gov. Mike DeWine recently warned that expanding internet gaming to phones could fuel addiction, especially among teens and young adults. He did not threaten a veto but urged lawmakers and the public to understand the consequences. The debate is outlined in Ohio Governor warns of rising addiction amid moves to legalize igaming, which notes two active bills: a Senate measure that would add online lottery and horse wagering with a weekly wagering cap, and a narrower House bill limited to slots and table games.

The House and Senate proposals, HB 298 and SB 197, illustrate how definitions matter. Whether prediction markets fall under casino-style rules, lottery oversight or financial regulation could dictate where and how companies operate, what products they can list and the consumer protections they must offer. For Fanatics, a multi-vertical approach means building compliance and risk controls for more than one rulebook while preserving a simple user experience. For users, the fight will determine access, limits and transparency around fees and conflicts.

The Crypto.com partnership as the execution hinge

Fanatics’ decision to partner with Crypto.com reduces execution risk by pairing a consumer brand with an exchange infrastructure built for continuous markets. The collaboration, previewed in reporting on early talks and later confirmed in Fanatics confirms entry into prediction markets with Crypto.com, follows a broader pattern. Crypto.com has supplied event-contract rails to multiple consumer platforms, and derivatives venues have formed partnerships with betting and fantasy operators to accelerate licensing and deepen liquidity from day one.

This model is emerging as a competitive standard. Exchanges bring market surveillance, clearing and connectivity to market makers. Consumer brands bring acquisition funnels, verified identities and content. If Fanatics can convert its sports audience while complying across jurisdictions, it can ride the same structural tailwinds lifting Kalshi and Polymarket, but with a built-in media and merchandise engine.

The next constraint is product scope. Platforms that list sports, financial and political markets tend to see higher engagement because news flow is constant. Yet non-sports listings draw greater regulatory scrutiny, especially around elections and economic indicators. Fanatics has signaled it will prioritize sports fans, but its partnership suggests room to expand into adjacent categories as rules clarify.

What to watch as trading and betting converge

Three threads will decide the pace from here. First, regulatory precedents: the Sleeper-CFTC case could influence how futures permissions are handled for consumer-facing platforms. Second, institutional participation: moves like Jump Trading’s market-making will determine liquidity, spreads and user trust. Third, state policy: debates like Ohio’s, and outcomes on measures such as HB 298 and SB 197, will shape how broadly event contracts can be offered and advertised.

Fanatics is entering early but not alone. If it can execute against a shifting rulebook and capture the crossover between sports fandom and retail trading, it can widen the moat around its broader sports commerce ambitions. If not, the capital and talent flowing to exchanges and rivals will set the pace, and the window for outsized gains could narrow.