Fanatics, a leading player in sports merchandising and collectibles, is reportedly exploring a partnership with Crypto.com to venture into the prediction market. This potential collaboration is still in the early discussion phases, with no official announcement made as of yet.
According to a report from the Financial Times, the discussions between Fanatics and Crypto.com are preliminary, and the details may evolve as negotiations progress. Fanatics is already a well-established entity in sports-focused retail and technology, particularly known for operating in the collectibles sector, including trading cards. The company has garnered significant investment, raising over $700 million from prominent firms such as SoftBank, Silver Lake, Fidelity, and Clearlake Capital, with a valuation reaching $31 billion as of December 2022.
The prediction market has gained traction as a burgeoning niche in the U.S., particularly in the realm of sports betting, attracting interest from both investors and bettors. Currently, this market is primarily led by a few dominant players, including Kalshi and Polymarket, which have seen rapid growth and heightened institutional interest. Recently, a number of new entrants have emerged, aiming to seize the momentum in this expanding sector.
Crypto.com, a global crypto exchange, has also made significant strides by introducing regulated event contracts and providing its infrastructure for various consumer-facing platforms, such as Underdog and Hollywood.com, as they launch dedicated prediction markets.
At the time of reporting, neither Fanatics nor Crypto.com had confirmed the developments regarding their potential collaboration. Fanatics currently operates a sportsbook through its subsidiary, Fanatics Betting and Gaming. However, the company’s executives had previously indicated a cautious stance towards entering the prediction market, largely due to concerns over regulatory uncertainty.
Despite earlier reservations, regulatory changes have revitalized the potential for prediction markets. The Commodity Futures Trading Commission (CFTC) has shifted its approach in recent months, moving towards greater acceptance of federally supervised prediction markets. This change follows a no-action letter issued by the CFTC in September, which approved Polymarket’s acquisition of QCX, thereby enabling the platform to resume U.S. operations.
The evolving regulatory landscape has encouraged major brands to engage with the prediction market. Recently, Polymarket has secured high-profile partnerships, including with the UFC, which is integrating prediction features into its live broadcasts, and Yahoo Finance, which is now featuring Polymarket odds on its platform.
As the discussions between Fanatics and Crypto.com advance, the prospect of a new entrant into the prediction market could further reshape the dynamics of sports betting and collectible trading, tapping into an increasingly favorable regulatory environment.
