Underdog Sports announced the launch of its Commodity Futures Trading Commission (CFTC)-approved exchange for its prediction markets over the weekend.
A Saturday release shared that the daily fantasy sports and prediction platform had secured federal approval, allowing it to manage its prediction markets completely internally. This eliminates third-party exchanges such as crypto.com and Kashi, both of whom had been enlisted as intermediaries to help Underdog offer prediction markets to consumers.
Underdog is growing in the prediction industry
Underdog is a familiar name all over the sports industry. Famous for its fantasy contests, the company also previously offered legal sports betting odds and is now growing into prediction markets.
“We started this company with a clear belief – there is so much more to be built for sports fans in America,” said Jeremy Levine, CEO and co-founder of Underdog. “Despite incredible changes in the U.S. market in recent years, through the twisting journey from fantasy sports to regulated sports betting to prediction markets, we still see an industry that far too often simply misses in serving sports fans.
“Now with our own exchange, we’re going to unlock so much for more sports fans. Prediction markets are largely about sports, and Underdog is the best at sports.”
Taking control over its exchange aligns Underdog with top competitors such as Kalshi and Polymarket, which are managed internally. Underdog will avoid paying third-party processing fees as a result of the move.
Underdog also previously acquired CFTC-approved Aristotle Exchange DCM, Inc. and Aristotle Exchange DCO, Inc., giving it the title of a Derivatives Clearing Organization and a Designated Contract Market operator. It is also registered as a Futures Commission Merchant (FCM), meaning it is the first and only sports company with all three licenses required to operate a prediction platform without external assistance.
Underdog keys in on prediction markets
Although Underdog is sticking by its fantasy sports contests, it is prepared to invest in the development of its prediction markets.
“Now with our own exchange, we’re going to unlock so much for more sports fans,” Levine said. “Prediction markets are largely about sports, and Underdog is the best at sports.”
As proof of that, Underdog walked back its entrance into the sports betting industry. It shut down operations in North Carolina in Dec. 2025 after launching in March 2024 and also withdrew its mobile sports betting license in Missouri in Nov. 2025, just a few days before the market’s grand opening.
Levine was on CNBC with The Exchange host Contessa Brewer last Friday; during his appearance, he revealed that his company had outperformed all of its competitors not named Kalshi or Robinhood since Sept. 2025.
He also claimed that Underdog generated $6.5 billion in notional trading volume, which was a tick ahead of Polymarket and well beyond DraftKings Predictions’ $1.2 billion figure. Notably, DraftKings recently said it was prepared to go “all in” on prediction markets as it continues to build its “super app.”
“Now that we’re launching on our exchange, what’s going to come over in the next few months as we head into NFL season, it’s going to be a huge leap and a lot more we can offer to our customers,” Levine said on CNBC on Friday, while noting that the World Cup was “amazing” for his platform.
The Trade Handle Prediction Markets Take
Prediction markets are only just beginning to take shape in America. Recent estimates from H2 Gambling Capital suggested that operators combined to produce 27% of the total sports betting handle during the World Cup, a figure three times above the estimated amount on New Year’s Day. Barring regulatory interjection or new product developments by sportsbooks, the continued investment of Underdog and its competitors should push that total even higher.