Fanatics wades into prediction markets as users seek fresh trading options

Fanatics will allow users in 24 U.S. states to trade event contracts tied to outcomes in sports, finance, politics and culture. These contracts let traders wager on specific scenarios and potentially profit if their predictions prove correct. The push highlights a shift in consumer finance where several companies, especially those vying for younger users, are leaning into speculative trading tools.

Digital sports firm Fanatics entered the prediction markets space on Wednesday, its first step into a fast-growing corner of finance that has exploded in popularity in recent years.

Once relegated to the fringe, prediction markets are now being treated by investors and analysts as an accurate gauge of market expectations. Critics, however, argue that they resemble gambling, and have pushed for tighter oversight. In response to potential regulatory roadblocks, some firms have limited the availability of such products only to certain U.S. states.

The influx of new entrants is intensifying competition in the sector, making it harder for platforms to stand out, especially compared to well-funded rivals such as Kalshi and Polymarket. Fanatics will allow users in 24 U.S. states to trade event contracts tied to outcomes in sports, finance, politics and culture. These contracts let traders wager on specific scenarios and potentially profit if their predictions prove correct.

The push highlights a shift in consumer finance where several companies, especially those vying for younger users, are leaning into speculative trading tools. "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," Fanatics betting and gaming CEO Matt King told Reuters.

"This is obviously a very fluid regulatory situation, and we've been in conversations with all our regulators about the best path forward," King said. Fanatics' event contracts will be offered through a partnership with Crypto.com's North America derivatives arm.

The company bought Paragon Global Markets, a broker registered with the Commodity Futures Trading Commission, in July to secure the infrastructure for the product. King says the market "is early enough in its development that you can't really say anybody is established."

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