Underdog Sports is pulling its fantasy sports licenses in seven US states to keep operating prediction markets after regulators forced a choice.
CEO Jeremy Levine confirmed the decision September 5 on X. The Drafts product will shut down in Massachusetts, Maryland, Michigan, Mississippi, New Jersey, Pennsylvania and Ohio immediately after the first NFL game September 9. Users already in drafts can finish them, but no new entries will be accepted.
The reason is regulatory conflict. Underdog won approval from the Commodity Futures Trading Commission for prediction markets, but regulators in the seven states said launching that product would void the company's fantasy sports licenses. "These states have taken a legal position we disagree with, so we had to choose," Levine said. "We could keep the fantasy licenses or drop them and offer the full experience except Drafts."
Levine called the decision difficult. Drafts was Underdog's first product when it launched in 2020, though usage runs well below the company's other services. "This sucks. I love Drafts," the CEO wrote. "It hurts that we can't do right by the Drafts community and offer the best experience to the maximum number of customers."
The company is working to bring Drafts back to more users, but Levine said it is too early to promise anything. User reaction ran negative, with comments asking the company to drop "this prediction market crap" instead of fantasy.
This is not the first time Underdog has cut existing products. In December the company closed its sportsbook in North Carolina to focus on fantasy and prediction markets.
