Underdog has launched prediction markets through its own federally regulated exchange, completing a shift away from relying exclusively on third-party venues for the contracts offered through its app.
The sports gaming operator previously provided access to event contracts as an intermediary for exchanges including Crypto.com and Kalshi. Its new structure allows Underdog to operate the trading venue and clearing organisation supporting the product.
The launch follows its March acquisition of Aristotle Exchange DCM and Aristotle Exchange DCO. Both entities are registered with the Commodity Futures Trading Commission, while Underdog also operates as a registered Futures Commission Merchant through Underdog Predict.
Together, the registrations give the operator control of the main federally regulated functions required to list, clear and provide customer access to event contracts.
Underdog said this makes it the first sports gaming business to hold the complete prediction market licence stack.
Underdog CEO and Co-Founder, Jeremy Levine, said: “Now with our own exchange, we’re going to unlock so much for more sports fans.”
Its move deeper into prediction markets follows an initial rollout with Crypto.com in September 2025. That launch allowed Underdog to offer sports event contracts in jurisdictions where regulated online sports betting was unavailable.
Prediction markets have since become a growing route into sports-related products for businesses including FanDuel and DraftKings, while Kalshi and Polymarket have expanded event-contract trading across sports, politics and other subjects.
The expansion has also produced a jurisdictional dispute. The CFTC maintains that event contracts listed by registered derivatives exchanges fall under federal commodities law, while several state regulators argue that sports contracts constitute gambling and must comply with state licensing, taxation and consumer protection requirements.
Legal challenges involving Kalshi and state authorities have continued across several jurisdictions, including New York, Michigan, Massachusetts, Ohio and Wisconsin.
The cases are testing how far federal commodities regulation can pre-empt state gambling laws when contracts are tied to sporting outcomes.
The CFTC is separately reviewing its approach to event contracts, including how contracts associated with gaming and other restricted activities should be assessed.
Underdog appointed former Crypto.com Chief Legal Officer Nick Lundgren as its Chief Legal Officer in May, weeks after acquiring the Aristotle entities. Lundgren was tasked with overseeing legal strategy, compliance and risk as the operator expanded its prediction market business.
Underdog was founded in 2020 and operates fantasy sports, regulated sports betting and prediction market products through a single app
