Fanatics is the U.S. sports-related retail and betting company, is preparing to make an important move to enter the rapidly growing prediction market with the announcement of a new partnership with Crypto.com the world’s largest financial-services and cryptocurrency exchange platform. CoinDesk+1
The announcement was given in the presence of Fanatics Chief Executive Officer Michael Rubin during an interview on CNBC and revealed that the product from the partner company is scheduled to be launched “within the next couple of weeks,” however, several operational details remain secret at the moment. CoinDesk+1
Why is this important? Markets for prediction allow customers to bet on outcomes of real-world events that include sports results to entertainment, politics, or even indicators of economic growth. The industry has seen rapid growth in recent years and Fanatics entry signifies an emergence of sports-betting companies that use crypto-enabled market mechanisms. CoinDesk
For Fanatics the move is aligned with a larger plan to grow beyond retail and traditional betting on sports to newer segments. Rubin explained it as part of their dedication towards “entering business that is important to our customers… and do it better.” World Casino News
Specifics of the partnership and the legal context
The agreement, Fanatics will leverage Crypto.com’s expertise and technology in event-based contract markets. Crypto.com has previously signed similar partnerships and created infrastructure for contract-based events. World Casino News
Rubin acknowledged the complexity of regulatory requirements as a hurdle to overcome: Fanatics currently holds sports-betting licenses in just 23 U.S. states and 27 states in which they have not yet commenced operations. The company sees potential in those areas for the brand new product. CoinDesk+1
State-level regulation remains a major aspect: certain jurisdictions permit events-contracts and prediction-markets within specific guidelines, whereas others see these as untested forms that are gambling, or derivatives. One example reported there was a problem within Nevada, Crypto.com recently saw legal challenges to the sports event-contracts. World Casino News
The competitive landscape
Fanatics is entering a market that is already filled with a variety of players. Platforms like Kalshi or Polymarket have been able to offer prediction contracts, while traditional betting operators like DraftKings as well as FanDuel have also made plans to expand into this market. World Casino News
Fanatics believes that its strong brand presence in the field of sports as well as its large customer base and capacity to incorporate new products gives it an edge. As Rubin said that traditional sportsbook operators might benefit from a competitive advantage in this new vertical. NEXT.io
Implications and Outlook
In the event that rollout of the product is successful it could be an important moment in the fusion of crypto-enabled sports betting, markets, and forecast economics. For Fanatics the launch of a prediction market product may increase the level of customer engagement as well as create new revenue streams, which go beyond bets and merchandise sales.
However, risks remain. The uncertainty of state regulations can mean availability could be restricted or delayed. Costs for compliance, state licensing issues, and the legal definition of event contracts could impact the speed of rollout as well as the extent. Additionally, Fanatics and Crypto.com will be required to provide user protections and transparency of odds dispute resolution, and how crypto rails are used, if they are used at all.
The conclusion
An announcement by Fanatics has entered the prediction market through the partnership with Crypto.com highlights the increasing recognition that events-based markets are rapidly becoming the norm in the field of digital finance and betting. Although the details of the product are in the dark and regulatory issues loom however, the move positions Fanatics as a potential contender within a rapidly evolving marketplace. How the rollout progressesin terms of countries as well as features of the product and acceptance is going to be monitored closely by the betting business and the wider crypto market community. C
