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Read Full BioUnderdog and Crypto.com have announced a new partnership that will offer sports prediction markets in 16 states across the US, primarily where sports betting is illegal.
Underdog becomes the first sports betting platform to expand into sports prediction markets.
“Prediction markets are one of the most exciting developments we’ve seen in a long time, ” Underdog founder and CEO Jeremy Levine said in a press release. “While still new and evolving, one thing is clear – the future of prediction markets is going to be about sports – and no one does sports better than Underdog.”
Crypto.com claims to be the first platform to offer sports prediction markets, which started with the Super Bowl in January this year. Since then, they have grown rapidly, with Kalshi, Robinhood, and Polymarket expanding the range of available markets to cover almost all sports.
The companies stated that the partnership will allow users to “trade their opinions on sports events contracts across all major sports leagues, including NFL, college football, NBA, MLB, and more.”
The sports event contracts will be provided by Crypto.com Derivatives North America (CDNA) exchange, which is licensed by the Commodity Futures Trading Commission (CFTC). Underdog’s platform will host the markets.
Travis McGhee, managing director and global head of capital markets at Crypto.com, commented: “We were the first to offer sports events contracts, and our technology partnership with Underdog will provide more access to CDNA’s innovative offerings.”
States Warn Betting Platforms About Offering Prediction Markets
Underdog currently operates in 40 states across the country, offering a variety of DFS products as well as sports betting in some states.
The move into prediction markets is likely to be met with strong opposition from state regulators. Last week, the Ohio Casino Control Commission (OCCC) sent a letter to sportsbooks licensed in the state, warning they risked losing licenses if they expanded into prediction markets.
Underdog is not licensed as a sports betting platform in Ohio, but offers a limited version of its DFS products due to state laws.
The company has also switched to a peer-to-peer version of its Pick’em games in California following Attorney General Rob Bonta declaring DFS illegal. Initially, the platform attempted to challenge Bonta’s right to issue his opinion against DFS, but this was rejected in court.
It has not been confirmed which states the partnership with Crypto.com will launch in, but CNBC reports that it will focus on states with no legal sports betting. This could well include California, and would compensate for the limited DFS operations Underdog now runs there.
New Football Season Sees Rush Towards Prediction Markets
Kalshi reported its biggest trading volume since the presidential election last year after the college football season kicked off over the weekend. The company expects to surpass the $87 million traded when NFL matches start on Thursday.
The platform has expanded its markets to include college football, offering point spreads and totals in addition to its moneylines. It has self-certified touchdown prop betting, but these have so far not appeared on the site.
Polymarket has also relaunched in the US for the new football season after acquiring the CFTC-licensed exchange QCEX. Underdog will become the first sports gaming platform to offer prediction markets, which could lead to others following.
FanDuel has already partnered with exchange platform CME, but said it will not offer sports markets for the time being. DraftKings has also been in discussions with Railbird about a possible partnership to enter the space.
It will now be interesting to see how states respond to Underdog and Crypto.com’s partnership. Five states have already issued Crypto.com cease-and-desist letters in response to its sports markets. The company responded in a similar fashion to Kalshi by filing lawsuits in Nevada and Maryland. There will most likely be more court cases to come.
