Fanatics and crypto.com have produced a new predictions marketplace called Fanatics Markets, which is now live in 24 states, with more on the way. It is a definitive move into the digital trading sector by the sportsbook, but controversy remains around the development.
It means residents in states like California, Texas, Georgia, and Washington, where legal sports betting is not allowed, will have access to the platform and be able to place so-called sports event contracts. Sports event contracts are structured as financial instruments, whereas traditional betting platforms are framed as entertainment products.
The states will not receive any taxation income for prediction market wagers by their respective citizens or resulting revenue by the company. Instead, the wider predictions marketplace is to be regulated by the Commodity Futures Trading Commission (CFTC) at a federal level.
Fanatics Betting and Gaming CEO Matt King said in a statement: “For years, Fanatics has given fans new ways to enhance their fandom through team merchandise, collectibles, tickets, gaming, events and more. Now, with Fanatics Markets, we’re giving fans a safe, intuitive and rewarding way to engage with the moments that move sports and culture, and to pick a side and profit along the way if their prediction is correct.
Crypto.com is to offer the prediction’s market pricing solution, with a shared wallet across the Fanatics ecosystem ensuring minimal friction in payments. Travis McGhee, the company’s global head of predictions at crypto.com, emphasized the firm’s commitment to player safety. He said: “Together we will provide fans with a safe and compliant way to access prediction markets.”
Fanatics win the sportsbook race
Fanatics beat stiff competition to become the first sportsbook to enter the market. The product allows users to bet on anything, from sporting contests to the result of a local election and anything in between.
The sector is still relatively early in its infancy, with only the likes of Polymarket and Kalshi really establishing their names in the space. King told CNBC’s “Squawk on the Street” on Wednesday: “This is really the top of the first inning on a market that’s going to grow exponentially over the next five to 10 years, so we’re not worried about being a couple months behind [competitors].”
DraftKings is expected to join Fanatics in the not-to-distant-future. The sports betting site completed the acquisition of Railbird Technologies and its subsidiary, Railbird Exchange LLC, back in October. They aim to release a new DraftKings Predictions app over the coming months, though there was no confirmation on whether users would be able to bet on sports.
Polymarket returns to US market
The Fanatics announcement comes at the same time Polymarket confirmed its return to the U.S. The world’s largest prediction market had been banned from offering its services after falling foul of regulators back in January 2022.
The regulatory barrier came from the CFTC, which found Polymarket had been operating an unregistered derivatives trading platform, specifically offering event-based binary options without the required regulatory registration (e.g. as a Swap Execution Facility or a Designated Contract Market).
As a result, the CFTC issued a cease-and-desist order, forced Polymarket to wind down existing non-compliant contracts, and imposed a civil penalty of US$1.4 million.
Polymarket operates on a blockchain system, which means users can deposit and wager in dollars or cryptocurrency.
Legal issues continue to cloud the future of prediction markets in the U.S.
A recent court result went against Kalshi in Nevada that could set a concerning precedent for the industry moving forward. State judge Andrew Gordon ruled the predictions market will have to operate under Nevada gaming rules, which means it is subject to oversight from state bodies and Indian tribes.
He said: “Kalshi’s interpretation would require all sports betting across the country to come within the jurisdiction of the CFTC rather than the states and Indian tribes. That interpretation upsets decades of federalism regarding gaming regulation, is contrary to Congress’ intent behind the Commodity Exchange Act (CEA), and cannot be sustained.”
Kalshi filed an emergency motion in the immediate aftermath, but defeat in the courts may slow the progress for federally regulated event-traded contracts. Key months lie ahead for the future of the prediction marketplace in the U.S.
However, it’s not all bad news. Kalshi recently announced a Series E funding round of $1 billion at an $11 billion valuation, while trading volumes are regularly surpassing $1billion every week, up over 1000% from 2024.
Announcing the Series E funding round, Tarek Mansour, CEO of Kalshi, said: “Kalshi is replacing debate, subjectivity, and talk with markets, accuracy, and truth. We have created a new way of consuming and engaging with information. It’s hard to have an opinion about the future today without thinking about Kalshi.”
References
- CNBC: https://www.cnbc.com/2025/12/03/fanatics-launches-prediction-market.html
- YOGONET: https://www.yogonet.com/international/news/2025/12/04/116633-fanatics-enters-prediction-market-race-with-launch-across-24-us-states
- Business Wire: https://www.businesswire.com/news/home/20251202735424/en/Kalshi-Reaches-%2411-Billion-Valuation-as-App-Takes-over-America
