Underdog was one of the first gaming operators to begin offering access to prediction markets trading on its platform. Almost a year later, it has launched its own in-house exchange.
The move, announced Saturday by the company, means the historically daily fantasy sports-focused operator now runs its own wholly-owned Underdog Exchange (UDX), which is registered with the Commodity Futures Trading Commission (CFTC).
The launch of the in-house exchange ensures that the operator no longer has to route its event contract trading through other prediction market platforms, such as its existing partnerships with Crypto.com and Kalshi.
CEO Levine sees PMs as sports product
The operator said in a press release that it is “the first sports company with the complete prediction market license stack”, as it both owns a designated contract market (DCM) and derivatives clearing organization (DCO), and also operates as an approved futures commission merchant (FCM).
Co-founder and CEO Jeremy Levine has been clear in the past that he sees prediction markets as being “primarily” about sports. He reiterated that approach to the vertical again in Saturday’s announcement.
“We started this company with a clear belief – there is so much more to be built for sports fans in America,” said Levine in a press release. “Despite incredible changes in the U.S. market in recent years, through the twisting journey from fantasy sports to regulated sports betting to prediction markets, we still see an industry that far too often simply misses in serving sports fans.
“Now, with our own exchange, we’re going to unlock so much more for sports fans. Prediction markets are largely about sports, and Underdog is the best at sports.”
Underdog takes prediction markets for a walk
Although FanDuel’s joint venture with CME Group was announced earlier, Underdog was the first gaming operator to begin actually offering access to sports prediction markets in its app in September 2025 via a technology partnership with Crypto.com.
Since then, it has hit several milestones in its diversification from a DFS-first operator to a prediction markets platform:
- December 2025: Underdog abandoned its existing sports betting operations in North Carolina, weeks after giving up the license it had obtained for Missouri’s sports betting market.
- January 2026: It earned National Futures Association (NFA) approval to operate as an FCM and a swap firm, allowing it to partner with other DCMs as well as Crypto.com.
- March 2026: It purchased Aristotle Exchange, a CFTC-registered DCM and DCO that is the operator of the PredictIt exchange. That acquisition facilitated July’s launch of UDX.
- April 2026: It added Kalshi’s sports and other contracts to its prediction markets offering.
Underdog currently offers prediction markets of some form in 39 states.
Could Underdog actually be a favorite?
So far, some of the data available suggests that Underdog has shown some bite in the increasingly competitive prediction markets landscape.
A Bank of America report last month found that Underdog is one of the biggest prediction markets in terms of notional volume, although it (and almost all others) pales in comparison with industry leader Kalshi.
Announcing the launch of the in-house exchange in an interview with CNBC’s Contessa Brewer, Levine said Underdog has generated the third-most notional trading volume in the regulated U.S. market since launching its predictions vertical in September, behind Kalshi and Robinhood.
That only accounts for Underdog’s early prediction markets operations, before it launched UDX.
Levine said Underdog will significantly expand its predictions product over the coming months ahead of the NFL season.
