Underdog Sports is being vindicated for going all-in on prediction markets.
Co-founder and CEO Jeremy Levine said at the Bank of America Gaming & Lodging Conference in New York last week that prediction markets were acquiring more customers and spending. The company previously focused on fantasy sports contests and dabbled in legal sports betting before making the change to a prediction market focus.
Underdog embraces prediction markets
Underdog joined the prediction industry through a partnership with crypto.com in Sept. 2025. At the time, it was the first company with a dedicated sports background to engage with prediction markets, which were still growing into the national spotlight.
The company transitioned to using an in-house use exchange in July, giving it complete control over contract processing and eliminating the need to pay processing fees to partner platforms like crypto.com.
“When we could only offer a sliver of the product, our customer handle was, doing the math in my head right now, well, a fourth what sportsbook’s customer handle is,” Levine said at the conference. “And prediction markets I think have even been higher because you get the trading dynamic and we’re seeing the climb happen rapidly in real time. So that’s super exciting.”
Levine noted that Underdog had been on a “real journey” since it first entertained prediction markets in 2025. The company forfeited its sports betting operator’s license in North Carolina and withdrew its application in the then-yet-to-be-launched Missouri market, allowing it to focus entirely on contract trading. That included states such as California, Texas and Georgia, which don’t have a legal sports betting framework in place.
A pivotal decision
The strongest confirmation of Underdog’s commitment to prediction markets occurred recently.
Fantasy contests have been the backbone of the platform’s operations since they began in 2020. Along with PrizePicks, the two dominated pick’ems and other forms of participation nationwide.
Despite that background, Underdog last week surrendered its DFS licenses in seven states — Maryland, Massachusetts, Michigan, Mississippi, New Jersey, Ohio and Pennsylvania — to increase its focus on prediction markets. Levine claimed that regulators in the states essentially forced the company to make a choice between the two offerings, and they followed the hot topic.
“This sucks, but I want to explain why,” he wrote on X. “We could keep our fantasy licenses in those states, or surrender the licenses and offer effectively our full experience, minus Drafts.
“It pains me that we can’t do right by the Drafts community and offer the best experience possible to the most customers,” he added.”
Supreme Court getting involved?
Underdog going all-in on prediction markets represents both a huge vote of confidence and sizable risk, given the regulatory disagreement over the industry.
The majority of state attorneys general have already expressed their displeasure with the current operational standards of prediction markets. Platforms licensed by the Commodity Futures Trading Commission argue that they are exempt from state regulation because of the U.S. Constitution’s Supremacy Clause, and that they are in line with their federal obligations.
Both sides have now appealed to the U.S. Supreme Court to settle the debate. New Jersey AG Jennifer Davenport made the call at the beginning of the month, and crypto.com and Robinhood both submitted recent petitions.
The Trade Handle Prediction Markets Take
Underdog is fully backing prediction markets as they continue to experience extraordinary growth. But just like the initial sports betting bubble, rival companies are joining the industry with great frequency, increasing competition within the industry. Underdog has a well-documented history in the sports scene, and it will be interesting to track how it uses that experience to grow in prediction markets.