Sports merchandise and collectibles giant Fanatics is reportedly considering entering the prediction market in partnership with Crypto.com.
summary
- Fanatics is reportedly considering a potential partnership with Crypto.com to enter the prediction market.
- The two companies are in the early stages of discussions and no formal announcement has been made yet.
The Financial Times reported that anonymous sources said potential cooperation plans between the two companies are still at an early stage and could change depending on how discussions unfold.
Fanatics is a sports-focused retail and technology company that also sells collectibles such as trading cards. The company has raised more than $700 million from major companies such as SoftBank, Silver Lake, Fidelity, and Clear Lake Capital, and is valued at $31 billion as of December 2022.
Prediction markets are emerging as a hot new niche in the US, and sports betting in particular is receiving a lot of attention from investors and bettors alike. The market is currently dominated by a few large players such as Karshi and Polymarket, both of which are witnessing rapid growth and increasing interest from institutional investors.
However, over the past few months, a number of new entrants have entered the space, hoping to capitalize on this momentum and secure an early foothold in the space.
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Crypto.com, a global cryptocurrency exchange, recently expanded into offering regulated event contracts, providing its infrastructure to a number of consumer-facing platforms such as Underdog and Hollywood.com in launching a dedicated prediction market.
Neither Fanatics nor Crypto.com had confirmed the development at the time of writing.
Fanatics already operates a sportsbook through its subsidiary Fanatics Betting and Gaming, but its executives have previously said they had no plans to move into the prediction market space, and top executives at the time remained cautious over regulatory uncertainty.
But a lot has happened on the regulatory front since these comments were made earlier this year.
Regulatory clarity helps predict market booms
Primarily, the Commodity Futures Trading Commission fined Polymarket in 2022 and banned the platform from the U.S. stateside over unregistered contracts, but it changed its tune 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 other companies a sign that the regulatory tide had turned in favor of federally supervised prediction markets.
Against this backdrop, Carsi, which is embroiled in several legal battles in U.S. states over whether its contracts should be treated as gambling or derivatives, has also won multiple court victories that strengthened its federal regulatory position.
As the regulatory environment becomes clearer, big brands are starting to bet big on this space.
For example, in the past few weeks alone, Polymarket has made multiple high-profile deals with big names like the UFC, which is integrating predictions into its live broadcasts, and Yahoo Finance, which is showcasing Polymarket odds across their platforms.
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