This time last year Underdog Fantasy was making waves in the industry as a disrupter. The 2023 edition of Global Gaming Expo was perhaps the peak of tension between sportsbook operators and the second wave of fantasy operators. Underdog Founder and CEO Jeremy Levine posted an open letter about what he perceived as the antagonist behavior of competitors and spoke with SBC Americas about the tension the company faced from the industry.
A year later things are quite different for Levine and company. Not only has Underdog officially launched a regulated sportsbook in North Carolina, but the company is rapidly growing and the list of new hires includes a number of familiar faces from the gaming operators that had been so critical of prop-style fantasy in the past.
List of former FD and DK employees at Underdog keeps growing
The Underdog team is now 450 people strong with new hires including former PointsBet COO Jake Williams, former FanDuel and DraftKings VIP expert Dillion Borgida and former VP of Marketing for FanDuel David Webb. These are far from the only new additions with tenures at regulated operators either.
“The two most important things for us are people and product velocity. A lot of what I focus on is finding the best people we can possibly bring in here. And that’s, that’s a lot of my time and a lot of my job. And I like to think it’s, it’s probably the most important thing I do is make sure that people at the company are the best people possible,” Levine told SBC Americas.
Levine is well aware Underdog is undergoing a critical growth phase. The key for him is finding a balance in building out an org chart that sets up the company for success but he is also keen to bring in good people if the opportunity arises.
“Requirement number one for us when we hire someone is, ‘Are they a good person?’ That’s always I think part of what makes the people at Underdog special,” he explained.
In the past, Levine has credited Underdog’s success to its different approach to sports games than traditional sportsbooks, but he is more than willing to welcome the growing list of employees from mainstream competitors. When asked about the balance between bringing in industry knowledge but retaining the startup culture, he explained that, even when it comes to hiring, his goal is innovation.
“I always view the right answer for how to innovate, as you look around and figure out what you believe to be best in class, and then you figure out how to make it better. This industry does a lot very well, and there’s a lot that we’ve been able to learn from and borrow from, and a lot we’re going to be able to extend.”
Levine still believes traditional sportsbooks are failing
That is not to say Levine has the highest opinion of his regulated sportsbook competitors.
“If you look at the current legal sportsbooks, they only have 6% penetration of the population. That means less than 10% of sports fans in states where sportsbooks are legal are using the sportsbooks. That’s a massive failure, and that’s the opportunity to build something way more compelling for sports fans in America.”
When asked about Underdog penetration, he admitted that they aren’t at a high level either but also argued that, as a startup, that isn’t the expectation at this point in its growth.
Underdog is rapidly growing though. Active users now exceed 2.4 million, up from just shy of a million users in 2023, with most of the growth coming in states without sports betting like California and Texas. The Underdog app ranks fourth in downloads this NFL season behind FanDuel, DraftKings and Prize Picks.
Underdog will launch in whatever state regulates next
When Underdog goes into its next sports betting market, Levine anticipates a similar level of market share as downloads, even though he admits he is not sure which state it will be.
Levine said Underdog is committed to launching in whichever state legalizes sports betting next, whether that be Missouri through referendum or a state like Georgia or Minnesota that may pass legislation next year.
That launch will look different than North Carolina, where Underdog first ventured into the regulated space.
“We launched a product there, what I think would be called a minimum viable product to get operational and make sure we can scale up our operations as we go forward into the next sports betting states. And we wanted to get to work really closely with the regulator there to make sure that we offer everything in the way they want us to,” said Levine.
North Carolina does not break down revenue by operator, so it is unclear how much of the market Underdog has captured. Levine acknowledged the tech is still a work in progress but he still believes the tech stack remains Underdog’s biggest advantage.
Levine still believes tech is Underdog’s ultimate advantage
“We’re the only company in the history of America to launch a sportsbook built on our own technology, and that allows us to focus on product velocity. It’s going to be one of the biggest advantages we have is we’ve built our own technology, so we can build on our technology way faster than anyone else can using third-party technology, whether they’ve now bought that third-party technology or not.”
Despite all of this growth, Levine still insists Underdog is a startup and he wants that spirit to remain in the organization as they scale.
The company looks markedly different than it did a year ago, but Levine’s response to how things have changed for his day-to-day pretty much sums up how the startup ethos is still alive and well.
“My day-to-day changes every day.”
