The fantasy sports operator Underdog Sports has completed its pivot to the prediction market sector, just months after laying off 20% of its staff and snapping up a derivatives clearing platform.
The firm said it had launched its own “federally licensed prediction market exchange.” In a press release, it said the platform would “provide Underdog customers even more ways to express their opinions on sports, culture and beyond, all within the existing Underdog app.”
“Despite incredible changes in the US 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,” said Jeremy Levine, the Underdog CEO and co-founder. “Prediction markets are largely about sports, and Underdog is the best at sports.”
Industry insiders recently told CasinoBeats that traditional sportsbook and fantasy sports platforms are now trying to muscle in on the sports prediction market with their own rival platforms, rather than hoping to defeat them in the legal sphere.
“The books are building their own prediction products,” said one expert. “Everybody’s hedging toward the same future.”
Underdog Sports: Prediction Market Pivot Nears Completion
In early March, Underdog paid an undisclosed fee to the PredictIt-run operator Aristotle for its federally regulated derivatives exchange and clearinghouse licenses.
Aristotle gained a Commodity Futures Trading Commission (CFTC) operating permit in September last year.
The deal potentially paved the way for Underdog to ditch its previous prediction market contracts with the crypto exchange Crypto.com and the market-leading operator Kalshi.
Other sportsbooks and financial players could soon follow suit. Last year, DraftKings snapped up the CFTC-licensed platform Railbird.
And the trading app operator Robinhood said in late November that it was “deepening our investment in prediction markets” by launching a joint venture with Susquehanna.
The firms bought up MIAXdx, another firm with CFTC-issued contract market, clearing, and swap execution permits.
Pipping Polymarket to Third
Levine told CNBC that there was already a “night and day” difference in Underdog’s prediction market offerings since it first launched services in September last year.
The media outlet also revealed a top five of notional volume flows since September 2025. This top five had Underdog in third place on just under $6.5 billion, narrowly above the prediction market giant Polymarket.
Topping the chart with $86.5 billion was Kalshi, with Robinhood in second at $32.5 billion and DraftKings making up the top five with $1.2 billion.
Earlier this year, Levine told the media outlet Front Office Sports that Underdog was “transitioning” its business in 2026.
He said the firm had moved from “a focus on a state-by-state framework to a national prediction markets platform with seamless offerings across the country.”
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The fantasy sports operator Underdog Sports has completed its pivot to the prediction market sector, just months after laying off 20% of its staff and snapping up a derivatives clearing platform. The firm said it had launched its own “federally licensed prediction market exchange.” In a press release, it said the platform would “provide Underdog
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