Fanatics Confirms Entry into Prediction Markets with Crypto.com for 2027

Fanatics confirmed its entry into prediction markets through a partnership with Crypto.com, setting 2027 as its goal to compete in sports betting and prediction markets. Michael Rubin, CEO of Fanatics, stated that the company aims to challenge DraftKings, FanDuel, and Kalshi within that time frame. The alliance positions Fanatics as a direct competitor to established sportsbook operators and the regulated prediction markets platform.

What Did Fanatics Announce and What Does the Agreement Cover?

Fanatics announced the partnership with Crypto.com as the operational pathway to launch its offering in prediction and sports betting markets in 2027. The confirmation includes the strategic decision to rely on Crypto.com’s technological infrastructure and compliance controls rather than operating its own exchange under a Commodity Futures Trading Commission (CFTC) license.

"We aim to challenge DraftKings, FanDuel, and Kalshi in 2027 in sports betting and prediction markets," said Michael Rubin, CEO of Fanatics.

The statement clarifies that the figure of $1 billion mentioned in headlines refers to the advertising expenditure planned by Fanatics broadly in sports betting, not an amount allocated exclusively to prediction markets.

Dependence on Crypto.com and Regulatory Implications for Fanatics

According to the statement, neither Fanatics nor Crypto.com has direct ownership in a CFTC-approved exchange. This condition requires both to channel volume through Crypto.com’s infrastructure and designation, and to accept the compliance timeline that the infrastructure necessitates. The model replicates the route traced by Robinhood's equity stake in Crypto.com announced two days earlier.

The dependence is material because the CFTC recently referred two rules on event contracts to the President's office in the White House, and state attorneys general are challenging preemption shields in states like Ohio and Tennessee. Any regulatory action against Crypto.com, or a delay in its designation by the relevant authority, would freeze Fanatics' launch window while licensed platforms like Kalshi and Polymarket continue to operate.

How This Affects the 2027 Launch Window and Liquidity Competition

The timeline extending to 2027 gives Fanatics time to align with regulatory and technical requirements. Even so, licensed competitors may consolidate liquidity networks and network effects that are difficult to replicate for a brand relying on a partner. Data from Needham cited in the announcement shows that DraftKings' DKeX exchange is already lagging behind Kalshi in NFL betting volume, 76% versus 3%. This difference illustrates the market share gap a new entrant could face.

The combination of liquidity, active market, and regulatory confidence favours platforms with current activity and licenses; Fanatics must avoid becoming another late entrant that burns capital to close a market share gap.

What This Means for Existing Operators and Platforms

For regulated operators like DraftKings and FanDuel, Fanatics' entry adds competitive pressure, especially in segments where Fanatics already has brand presence. For licensed prediction markets platforms, the news reinforces the first-mover advantage: maintaining orders, market depth, and compliance history will continue to be a commercial argument against brands reliant on third parties.

Technology and liquidity providers will watch whether Fanatics opts to integrate liquidity services from Kalshi or Polymarket, or attract its own market makers. Meanwhile, volume metrics—not just advertising expenditure—will be the key indicator to assess competitive progress.

Regulatory and Market Risks That Could Delay or Block the Launch

The specific points of risk are twofold. First, any regulatory action against Crypto.com could limit Fanatics' ability to receive the necessary designation or operate event contracts in U.S. markets. Second, the erosion of preemption protections by state attorneys, exemplified by litigation in Ohio and Tennessee, may create legal uncertainty for event contracts and for platforms relying on third parties for execution.

If Crypto.com's designation is delayed, Fanatics will not be able to launch within the expected window and will lose critical time relative to Kalshi and Polymarket, which would continue to allow operations.

What Investors and Regulators Should Watch For

Investors should monitor three signals: the formal confirmation of Crypto.com’s regulatory designation to operate event contracts, progress on the CFTC rules following their referral to the White House, and the evolution of state litigation regarding preemption in Ohio and Tennessee. Regulators and state attorneys will largely determine when and how Fanatics can materialize its entry.

News on advertising expenditure is relevant, but the real battle will be for liquidity and compliance. For commercial audiences, the practical takeaway is clear: the infrastructure and regulatory standing of the partner chosen by Fanatics will be the determining factor in whether its 2027 target is viable or merely aspirational.

For related reading on how competition in prediction markets affects sportsbooks, see sector analysis on sports betting and regulatory updates on regulation.