Fanatics, a sports merchandising and collectibles giant, is reportedly mulling an entry into the predictions market in partnership with Crypto.com.
Summary
- Fanatics is reportedly exploring a potential partnership with Crypto.com to foray into the prediction market.
- The Companies are in early stages of discussion, and an official announcement is yet to be made.
According to a Financial Times report, the plans for a potential collaboration between the two are still in early stages and could change depending on how discussions unfold, as per information from unnamed sources.
Fanatics is a sports-focused retail and technology company that also operates in collectibles like trading cards. The company has raised over $700 million from big names like SoftBank, Silver Lake, Fidelity, and Clearlake Capital, and was valued at $31 billion as of December 2022.
Prediction markets have emerged as a hot new niche in the U.S., and sports betting, specifically, is drawing in a lot of attention from investors and bettors alike. Currently, the market is dominated by a few major players like Kalshi and Polymarket, both of which have witnessed rapid growth and increasing institutional interest.
However, over the past few months, a number of new entrants have made their way in a bid to capitalize on the momentum and secure early footholds in the sector.
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Crypto.com, a global crypto exchange, has recently forayed into providing regulated event contracts and has offered its infrastructure to a number of consumer-facing platforms like Underdog and Hollywood.com in launching dedicated prediction markets.
Neither Fanatics nor Crypto.com had confirmed the development at press time.
Fanatics already operates a sportsbook via its subsidiary Fanatics Betting and Gaming, but the company leadership had previously clarified that it had no plans to enter the prediction markets space, with top executives remaining cautious over the regulatory uncertainty at the time.
However, since those comments were made earlier this year, a lot has happened on the regulatory front.
Regulatory clarity prompts predictions market boom
Mainly, the Commodity Futures Trading Commission, which had fined Polymarket back in 2022 and sent the platform away from U.S. shores over unregistered contracts, has flipped its stance in recent months under President Donald Trump’s administration.
Back in September, the CFTC issued a no-action letter approving Polymarket’s acquisition of QCX, effectively clearing the way for Polymarket to resume operations in the United States and giving others a sign that the regulatory tide had turned in favor of federally supervised prediction markets.
Against this backdrop, Kalshi, which has been embroiled in several legal battles across U.S. states over whether its contracts should be treated as gambling or derivatives, has also notched multiple courtroom wins that reinforced its federal regulatory positioning.
With the regulatory environment becoming clearer, the big brands have started betting big on the space.
For instance, over the past few weeks alone, Polymarket has notched multiple high-profile deals with names like the UFC, which is integrating prediction features into live broadcasts, and Yahoo Finance, which is now showcasing Polymarket odds across its platform.
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