Underdog Sports has officially launched its own CFTC-regulated prediction market exchange, completing a strategic pivot that’s reshaping how the fantasy sports operator competes in an evolving regulatory landscape. The platform integrates directly into Underdog’s existing app, giving customers fresh ways to bet on sports outcomes, cultural events, and beyond.

The move follows Underdog’s acquisition of regulatory licenses from Aristotle earlier this year, securing the derivatives exchange and clearinghouse permits that give the company federal authority to operate independently. Smart play: rather than rely on partnerships with platforms like Crypto.com or Kalshi, Underdog now controls its own infrastructure.

Racing to Regulate

What’s striking is how quickly the prediction market space is consolidating around licensed operators. The traditional sportsbooks aren’t sitting around waiting to see if prediction markets become the next big thing. They’re building their own. DraftKings grabbed Railbird’s CFTC license last year. Robinhood and Susquehanna teamed up to acquire MIAXdx. The message is unmistakable: control your own destiny, or risk being locked out.

Jeremy Levine, Underdog’s CEO, frames this as addressing a gap in customer experience. One industry insider put it bluntly: “The books are building their own prediction products. Everybody’s hedging toward the same future.” Levine’s stated focus on serving sports fans better through prediction markets positions Underdog as doubling down on what it knows.

The Numbers Game

Early traction looks solid. Since launching prediction market services last September, Underdog has captured just under $6.5 billion in notional volume, landing third place in the sector. That’s impressive company, though Kalshi still dominates with $86.5 billion, followed by Robinhood at $32.5 billion.

The transition hasn’t been painless. Underdog cut 20% of staff earlier this year as part of its strategic restructuring. Still, the company frames 2026 as a turning point where state-by-state complexity gives way to a unified national platform.

Whether Underdog can maintain momentum in a crowded field? We’ll see. At least now the company’s betting on itself.