Underdog Becomes the First Sports Company with the Complete Prediction Market License Stack
Underdog just stopped renting and started owning. The sports prediction market and fantasy sports company launched its own federally licensed prediction market exchange, wholly owned and operated by Underdog and licensed by the Commodity Futures Trading Commission. For a company that spent the last year as a middleman on other people’s rails, this is the moment it takes control of the whole stack.
What the Underdog Prediction Market Exchange Actually Changes
Until today, Underdog offered prediction markets by plugging into other exchanges. It was an intermediary partner, sending its customers to markets run by names like Crypto.com and Kalshi. That model worked. It got Underdog to the front of the queue as the first sports gaming operator to put sports prediction markets inside its app last fall.
But being an intermediary means you live on someone else’s economics, someone else’s product roadmap, and someone else’s risk appetite. Now that dependency is gone. The new exchange sits directly inside the existing Underdog app, so customers get more ways to express opinions on sports, culture and beyond without leaving the environment they already use.
Why the Full Prediction Market License Stack Matters
Here is the part most operators will read twice. Underdog now holds the complete prediction market license stack, and it is the first sports company to do so.
In March 2026, the company acquired a Designated Contract Market and a Derivatives Clearing Organization. It is also a registered Futures Commission Merchant. Put those three together and Underdog controls the market where contracts trade, the entity that clears them, and the merchant relationship with the customer. That is vertical integration in a corner of the market where almost everyone else is still stitching partnerships together.
Owning all three licenses is not a vanity flex. It means margin stays in house, product decisions move faster, and Underdog is no longer exposed to a partner changing terms or pulling access.
The Strategic Read for Operators and Founders
Jeremy Levine, CEO and co-founder of Underdog, framed the launch around a belief he says has driven the company from the start, that there is far more to be built for sports fans in America than the industry has delivered. He argued that through the shift from fantasy sports to regulated sports betting to prediction markets, too many players in the space keep missing what fans actually want. His point on the exchange was blunt. Prediction markets are largely about sports, and Underdog believes it is the best at sports.
Strip away the founder confidence and the commercial logic is clear. Prediction markets have become the newest front in the fight for the American sports fan, and the CFTC route offers a federally licensed path that sidesteps the state by state grind of traditional sports betting. Owning the exchange lets Underdog compete on that federal footing with its own product, its own margins, and its own speed.
Future Outlook for Underdog and the Prediction Market Sector
The obvious question now is what Underdog builds on top of infrastructure it fully controls. With the market, clearing, and merchant layers all in house, the company has the freedom to launch sports and culture markets on its own timeline rather than waiting on a partner. Expect the product surface to widen.
For the wider sector, Underdog just set a benchmark. A sports company owning the entire license stack raises the bar for every operator still relying on third party exchanges to offer prediction markets. The competitive question for rivals is simple.
Source: Underdog
