Underdog is surrendering its fantasy sports licences in seven states — Maryland, Massachusetts, Michigan, Mississippi, New Jersey, Ohio and Pennsylvania. Regulators in those jurisdictions consider prediction market and DFS operations incompatible. Founder and CEO Jeremy Levine disagrees with that position, but the choice has been made: from 10 September, the Drafts product stopped accepting new entries in those states.
Levine explained the decision on Twitter. States imposed a condition: either a CFTC licence for prediction markets or fantasy sports. Underdog chose the former. Drafts remains available in 33 states and Canada (excluding Ontario), but the move signals where priorities lie. The company launched prediction markets last September with Crypto.com, and Levine called the vertical 'one of the most interesting in a long time'. Now the company refuses to shut it down for the sake of DFS, even though fantasy was Underdog's original product.
In July, IG Group announced the acquisition of Underdog for $1.1bn. The UK fintech holding is interested in the 'licence stack' and the audience: more than 60% of Underdog's active users are under 30, while IG Group's average client is 42. IG Group CEO Breon Corcoran called Underdog 'a product-focused team with a full set of licences for prediction markets in the US'.
No prediction platform has yet obtained a Gambling Commission licence in the UK itself. The regulator demands the same permissions it requires from bookmakers, which operators dispute. Britain is now reconsidering its stance: the FCA may return to the question of retail binary options in September and clear the way for prediction markets. If that happens, Underdog will likely shift focus toward predictive markets even further.
