Underdog’s transition from a popular daily fantasy sports platform to a prediction market operator took a major step Monday.
Key Takeaways
- Underdog’s purchase of a DCM and DCO company allows it to offer its own sports event contracts.
- The DFS operator will expand its prediction offerings and will include other markets soon.
- Underdog began signaling this transition in late 2025.
The company announced it has acquired Aristotle Exchange, Inc., giving Underdog a federally regulated Designated Contract Market and a Derivatives Clearing Organization to offer its own sports event contracts.
Underdog has been making prediction picks available on its platform through a partnership with Crypto.com. The DFS operator says the new purchase allows for an expansion of sports event contracts and other markets, which are both regulated by the Commodity Futures Trading Commission (CFTC).
Enjoying Covers content? Add us as a preferred source on your Google account“We look forward to working with the CFTC to offer an exchange that brings even more options to enjoy sports to our customers,” Jeremy Levine, CEO and cofounder of Underdog, said in a statement. “We’re in the early innings of what prediction markets can be, especially for sports fans. We’ll use this opportunity to bring the same relentless focus on innovation and experience that we’ve always brought to our customers.”
Major developments
The Aristotle Exchange purchase comes shortly after Underdog laid off 125 employees, including two-thirds of its fraud department, in a move to focus on prediction markets, which Levine called “a different operation.”
Underdog left the traditional sports betting business in late 2025 after it declined to launch in Missouri on Dec. 1 and closed its only sportsbook in North Carolina later that month.
The company then signaled it was heading into the prediction market space, which is not regulated or taxed at the state level, giving Underdog access to more jurisdictions with sports event contracts that are similar to sports betting markets like spreads and totals.
Underdog launched DFS operations in 2022 and has grown to offer its contests in over 40 U.S. states and Canada. It became the first DFS platform to venture into prediction markets when it included Crypto.com’s sports event contracts in its product in September 2025. This gave Underdog a prediction market presence in 30 states, including California, Texas, and Georgia, where sports betting is not legal or regulated.
“The reality is, prediction markets are primarily about sports, and no company knows how to engage with sports fans and create products for sports fans better than Underdog,” Levine said.
Crowded space
Predicton market sites have exploded since sports event contracts began popping up on Kalshi, Robinhood, and Crypto.com in early 2025, and there is no sign of a slowdown. Underdog competitor PrizePicks, which is exiting Canada, is also offering sports event contracts and plans to expand more into the space.
Popular sports betting brands DraftKings, FanDuel, and Fanatics all launched prediction market platforms last year, around the same time that global trading exchange Polymarket returned to the U.S.
Novig, a growing sweepstakes exchange, has applied for CFTC approval.
